Goldman Sachs analysts believe that the cryptocurrency Ethereum has the potential to overtake Bitcoin in the coming years.
According to Arab Net, although Bitcoin is up 300% in 12 months, this rise appears weak against Ethereum - the second largest cryptocurrency after Bitcoin from Where the value - which rose by about 800% during the same period.
The high volatility of cryptocurrency prices means that cryptocurrencies cannot directly compete as an asset and a safe haven like gold.
Ethereum currently looks like the cryptocurrency with the highest real use potential as it is the most popular development platform for smart contract applications, according to Goldman Sachs analysts. Mentioned by Forbes.
Ethereum has seen a flurry of activity on its network over the past 12 months, due to the growing popularity of so-called decentralized finance (DeFi) and non-fungible tokens (NFTs), Both are heavily built on the Ethereum blockchain network.
This year, DeFi, the idea that traditional financial products can be recreated using crypto technology instead of the bank, has grown into a multibillion-dollar market, while NFTs, which Symbolizing all kinds of digital assets and media on blockchain, it has captured the attention of artists, creators, and sports stars.
Bitcoin is currently trading at $32,000, with a market capitalization of about $600 billion, while Ethereum is currently trading at $2,100, with a market capitalization of $250 billion.
At the same time, Goldman analysts have warned that competition between Bitcoin, Ethereum, and the myriad of Ethereum competitors that have emerged in recent years, is exacerbating volatility and blocking cryptocurrencies. from becoming a so-called safe haven asset like gold.
Gold competes with cryptocurrencies just as much as other risky assets such as stocks and commodities, the bank researchers wrote. They added: We consider gold as a defensive hedge against inflation, and cryptocurrencies as a risk factor for this inflation hedge.
The recent sudden collapse in cryptocurrency prices has wiped out more than $1 trillion from the market value of all currencies in recent months.
