• If ‘Ethereum has already surpassed Bitcoin in popularity,’ What are institutions expecting?

  • Since Bitcoin’s rally last year, high-level financial institutions have prioritized the cryptocurrency’s value. However, while companies such as Microstrategy and Tesla have invested heavily in the top digital asset, Ethereum is still lagging far behind.

    Companies like Coinbase, on the other hand, may be changing that narrative, with the NASDAQ-listed cryptocurrency exchange recently announcing plans to invest millions in purchasing Ether and other altcoins.

    Even so, other companies with no crypto-allegiances aren’t rushing to add ETH to their balance sheets. According to Ryan Selkis, this scenario may soon change.

    During a recent podcast, the CEO of Messari predicted that Ethereum would quickly gain popularity among institutions. Why? Because all new crypto-assets have a half-life. He elaborated,

    “The first asset that almost all new buyers will probably accumulate for their treasury or as part of an investment strategy is going to be Bitcoin, and you know ether is going to be number two.”

    According to the executive, it also comes down to their value propositions, which are digital gold vs. token interest in the “financial Internet.” In that regard, “Ethereum has real transaction volumes, real applications running on top of it,” he added.

    Because both networks are at the top of their respective classes, there may come a time when their market capitalizations are equal. Selkis, noting that such a scenario would be intriguing, said,

    “You’ll have Bitcoin and Ethereum maximalists at each other’s throats, arguing in perpetuity over a bogus contract and a bogus debate because they’re two completely different things that happen to be the same size.”

    However, it would make Ethereum a “much better trade,” he said.

    Many supporters believe that Ethereum flipping Bitcoin, or “flippening,” is simply a matter of time. According to Selkis, however, comparisons of market cap and price should not be used to assess the same because they are “most irrelevant metrics.”

    “Even on Coinbase, we saw more trading volume on Ethereum last quarter than on Bitcoin, and one could obviously argue that Ethereum is already more popular than Bitcoin based on transaction volume or any number of other metrics.”

    Ethereum is currently the most popular blockchain in the world, thanks to the thousands of applications and platforms that have been built on top of it. Because payments on the network are made using the network’s native token, ETH transaction volume has naturally been higher than BTC. The latter is actually preferred as a value store by the majority of users.

    Nonetheless, the analyst was not entirely complimentary of Ethereum. While ETH 2.0 appears to be on the horizon, Selkis believes the transition to Proof-of-Stake may still face “execution risk.” He continued,

    “I don’t think Ethereum is the clear winner when it comes to settling decentralized finance transactions or any type of value transfer, whether it’s NFTs or currencies.”

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