Ethereum Could Replace Bitcoin As The Dominant Store Of Value, Says Goldman Sachs

Wall Street banking giant Goldman Sachs Group Inc sees potential in Ethereum (CRYPTO: ETH) becoming a better-suited store of value than market-leading cryptocurrency Bitcoin (CRYPTO: BTC).

What Happened: In a report seen by Business Insider, the bank highlighted Ethereum’s utility in being the smart contract platform of choice for the majority of decentralized finance (DeFi) applications as one of the reasons why it could eventually overtake Bitcoin.

“[Ether] currently looks like the cryptocurrency with the highest real use potential as Ethereum, the platform on which it is the native digital currency, is the most popular development platform for smart contract applications,” said the Goldman Sachs analysts in a note to clients on Tuesday.

Why It Matters: According to the analysts, Bitcoin’s dominance as the leading cryptocurrency by market cap, and its reputation as a store of value, comes from its “stronger brand” driven by its first-mover advantage.

However, Bitcoin’s relatively slow transaction speed and lack of “real use cases” puts Ethereum in a better spot to become the more dominant store of value in the realm of cryptocurrencies.

The analysts referred to both Bitcoin and Ethereum as a risk-on inflation hedge and said that comparisons to the more conventional store of value assets, like gold, weren’t suitable at the time.

Read also: Will Ethereum Recover Stronger Than Bitcoin? Goldman Sachs Thinks So

“Gold is competing with crypto to the same extent it is competing with other risky assets such as equities and cyclical commodities. We view gold as a defensive inflation hedge and crypto as a risk-on inflation hedge,” they said.

“This competition among cryptocurrencies is another risk factor that prevents them from becoming safe-haven assets at this stage.”

Price Action: Bitcoin was trading at $34,627 at the time of writing, slightly up by 1.53% over the past 24-hours.

Ethereum was up 2.21% during the same period and traded at $2,349 at press time.

This news is republished from another source. You can check the original article here

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