According to a recent report by Goldman Sachs, Ethereum is the cryptocurrency with the greatest potential.
This was reported by Business Insider , who reveals that in the note Goldman Sachs writes:
“[ETH] currently appears to be the cryptocurrency with the highest real use potential as Ethereum, the platform of which it is the native digital currency, is the most popular development platform for smart contract based applications.”
Business Insider, who did not report the source from which he would have received this report, also speculates that according to the banking giant ETH it could also surpass BTC by market capitalization, although Bitcoin has a stronger brand given the advantage of coming first. However, Bitcoin would have few real use cases and would have too slow transaction speeds.
In reality, with Lightning Network, for example already widely used in El Salvador, transactions in BTC are already faster and cheaper than those on Ethereum, and this is not the only element that can lead one to assume that Goldman Sachs may still be only at an initial level of understanding of the crypto sector.
The curious thing is that a few weeks ago , Goldman Sachs’ Head of Commodities Research, Jeff Currie, proved to have a very clear and precise idea of the role that bitcoin is carving out within the global financial markets, leaving aside Ethereum because it simply has a different role.
On the same note, Goldman Sachs also reveals that it believes that neither ETH nor BTC will be able to outperform gold anytime soon, particularly due to the high volatility.
But then he clarifies by saying:
“Gold competes with cryptocurrencies to the same extent that it competes with other risky assets such as stocks and cyclical commodities. We see gold as a defensive hedge against inflation and cryptocurrencies as a risk-on hedge against inflation ”.
So the Goldman Sachs note incorporates Currie’s hypotheses, but referring them not only to bitcoin, as his Head of Commodities Research does, but to cryptocurrencies in general, forgetting that the vast majority of cryptocurrencies are not at all, and in any way, a hedge against inflation.
The note also adds:
“This competition between cryptocurrencies is another risk factor that prevents them from becoming a safe haven at this stage.”
Bitcoin vs Ethereum?
There is no competition between Bitcoin and Ethereum. Ethereum competes with other similar platforms, such as Binance Smart Chain or Cardano, but in fact Bitcoin has no real competitor to date.
The idea that Ethereum was, or could be, a Bitcoin competitor has been around for some time now, so much so that the same hypothesis that ETH can outperform BTC by market capitalization has consistently emerged, for years, when its price increases more. than that of bitcoin, as in the course of 2021.
However, the hypothesis that these two cryptocurrencies are in competition is definitely outdated, if not downright, and the question of overtaking market capitalization has already proved to be fallacious several times. However, it remains a hypothesis in some ways plausible, but the trend of the price of ETH still seems to depend too much on that of BTC because we can really imagine a divergence between the two trends that can really lead ETH to overcome BTC by capitalization of market.