Despite the current low point of the historical correction in the Bitcoin price on May 19, 2021, interest in the crypto markets still seems to be in the Altcoins. Ethereum overtook the world's largest cryptocurrency with a trading volume of around USD 60 billion, while BTC only managed around USD 50 billion.
Number 2 of the largest cryptocurrencies, Ethereum (ETH), is seeing fresh interest from investors. Although the Ethereum price came under strong pressure due to the historical slump in BTC, the recovery at ETH now seems to be going better. In any case, the daily trading volume clearly shows Ether ahead of Bitcoin.
The increased interest in Ethereum is also reflected in the premium of the Grayscale Ethereum Trust (ETHE). Because this premium is now back at around 11%, while there are still discounts on Bitcoin. A clear sign of the asset that institutional investors currently prefer at Grayscale.
Ethereum in the spotlight among investors in the markets
The year 2021 is not only the year of the bull market in Bitcoin but above all the year of more and more interest from various investors in other cryptocurrencies. Just as investors in the crypto markets are used to the rotation of capital in Altcoins (aka the Altcoin Season), a trend towards "not just Bitcoin" also seems to be emerging among institutional investors. Above all: Ethereum (ETH).
And not only the retail market itself suggests a greater interest in Ethereum at the moment. Institutional investors at Grayscale also seem to see more potential in the number 2 cryptocurrency. After all, the premium at ETHE is positive, while the Bitcoin premium has been negative since March 2021.
Goldman Sachs sees ETH over Bitcoin
The so-called "flippening" of Bitcoin by Ethereum is again causing discussions due to the latest market situation. "Flippening" here means that ETH has a larger market capitalization (a higher total value) than Bitcoin. And the US financial giant Goldman Sachs is addressing precisely this discussion by calling Ethereum a potentially better store of value than Bitcoin.
Ethereum beats Bitcoin as a store of value. The [ETH] ecosystem [...] offers developers the opportunity to develop innovations. Most of the DApps run on Ethereum. The larger number of transactions via ETH demonstrates this dominance.
In addition, Goldman Sachs argues that a store of value would not be defined by rarity, but by demand. This would be the core argument of the strong limitation of the total amount of Bitcoin off the table. But the discussion is not that simple. Flippening would only put Ethereum above Bitcoin in total, but the use cases of both assets would not change.
Ethereum never claimed to be a common currency, nor a store of value in the sense of gold, for example. Even if the course of the total amount of ETH with EIP-1559 were deflationary this summer, the use case for Ether is still different.
Where there is digital gold, there can also be digital silver
While Bitcoin continues to lag behind Ethereum as “digital gold”, various communities and institutions seem to want to establish the narrative of “digital silver” here. Flippening or the potentially deflationary course of Ethereum would accelerate this narrative, but not devalue Bitcoin as a store of value as a whole.
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