A new research report out of Wall Street banking giant Goldman Sachs predicts Ethereum overtaking Bitcoin as a store of value asset.<\/p>\n
Santiago Roel Santos, General Partner at blockchain-focused investment firm ParaFi Capital, published a series of tweets showing excerpts from relevant sections of a 41-page report (titled: \u201cCrypto: A New Asset Class?\u201d) by Goldman\u2019s Global Macro Research team, which was published on May 21.<\/p>\n
The authors of the report had this to say about Ethereum:<\/p>\n
\u201cGiven the importance of real uses in determining store of value, [Ethereum] has a high chance of overtaking Bitcoin as the dominant digital store of value. The Ethereum ecosystem supports smart contracts and provides developers a new way to create new applications on its platform. Most decentralized finance (DeFi) applications are being built on the Ethereum network, and most non-fungible tokens (NFTs) issues today are purchased using Ether. The greater number of transactions in Ether versus Bitcoin reflects this dominance.<\/em> As cryptocurrency use in DeFi and NFTs become more widespread, [Ethereum] will build its own first-mover advantage in applied crypto technology.<\/em>\u201c<\/p>\n As for Bitcoin, they said:<\/p>\n \u201cA major argument in favor a of bitcoin as a store of value is its limited supply. But demand, not scarcity, drives the success of stores of value. No other store of value has a fixed supply. Gold supply has grown nearly ~2% pa for centuries, and it has remained an accepted store of value. Plenty of scarce elements like osmium are not stores of value. In fact, a fixed and limited a supply risks driving up price volatility by incentivizing hoarding and forcing new buyers to outbid existing holders, potentially creating financial bubbles. More important than having a limited supply to preserve value is having a low risk of dramatic and unpredictable increases in new supply. And ether, for which the total supply is not capped, but annual supply growth is, meets this criterion.<\/em>\u201c<\/p>\nDisclaimer<\/h2>\n