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Bitcoin is the largest crypto by market cap and is currently valued at $715 billion based on Coinmarketcap data. While Ether only has a market cap of $316 billion, which is just around 50 percent of BTC’s, a recently released report suggests that ETH could surpass BTC and become the dominant store of value cryptocurrency.
A leaked report from Goldman Sachs suggests that Ether, the second-largest crypto by market cap, has a “high chance” of surpassing Bitcoin as a dominant store of value. The bank explained that the use cases of ETH have already proven and there are still untapped potential use cases for the crypto.
Basically, Ether’s advantage lies in the fact that it is the native cryptocurrency of the Ethereum blockchain. As activity on the blockchain increases, ETH’s usefulness, store of value property, and the price will rise as well.
“Given the importance of real uses in determining store of value, ether has a high chance of overtaking bitcoin as the dominant digital store of value,” Goldman Sachs said in a note. “The Ethereum ecosystem supports smart contracts and provides developers a way to create new applications on its platform.”
The bank noted that most decentralized finance applications are currently being built on the Ethereum network. As the favorite blockchain of choice among DeFi players, it is also safe to assume that the network will likewise attract a sizable portion of future decentralized finance projects.
Another trend that could help fuel Ether’s rise is the increasing popularity of non-fungible tokens (NFTS), which are usually traded using Ether. By now, most people have heard of digital works of art being tokenized and selling for millions of dollars at auctions.
“The greater number of transactions in ether versus bitcoin reflects this dominance,” Goldman Sachs said. “As cryptocurrency use in DeFi and NFTs becomes more widespread, ether will build its own first-mover advantage in applied technology.”
Indeed, DeFi activity has been driving ETH’s price upward, which has outpaced BTC in terms of gains. Ether gained around 266 percent year-to-date while Bitcoin only gained around 30 percent year-to-date based on Coindesk data.
But Goldman Sachs believes that DeFi and NFTs represent only a tiny peak of Ether’s practical uses. “For example, individuals can store and sell their medical data through Ethereum to pharma research companies,” the bank wrote.
Aside from medical data, the Ethereum network can also be used to safely store other sensitive data such as IP rights and asset ownership. “Ethereum also has the benefit of running on a decentralized global server base rather than a centralized one like Amazon or Microsoft, possibly providing a solution to concerns about sharing personal data,” Goldman Sachs said.
