Its increasing popularity makes ETH a serious contender to pass BTC and take over as the most valuable digital currency.
Breathing Down Its Neck
Is BTC at risk of losing its position as the world’s most valuable digital currency? Well, according to Goldman Sachs, it just might be. Being one of the top American investment banks, people tend to listen when Goldman Sachs speaks. A mention that Bitcoin should be feeling Ethereum breathing down its neck as the competition stiffens, has given us something to talk about around the office water cooler.
Reach the Top In the Coming Years
Gathering momentum and a 13% jump just over the last week, Ethereum has the highest increase among the top 5 cryptocurrencies. A market cap of more than $275 billion and a 19% market share definitely makes it a contender. Goldman Sachs believes ETH could actually make it all the way to the top in the coming years.
Although it may sound good, a development like that does not come without risks.
“ETH currently looks like the cryptocurrency with the highest real use potential as Ethereum, the platform on which it is the native digital currency, is the most popular development platform for smart contract applications. The competition among cryptocurrencies is another risk factor that prevents them from becoming safe-haven assets at this stage,” said Goldman Sachs.
Gold Is Still Number One
No matter how much of an increase in popularity Ethereum and Bitcoin may experience, gold is still sitting quite comfortably at the top of the mountain of safe haven assets. According to Goldman Sachs, this is because of the risky nature of a digital currency.
“Gold is competing with crypto to the same extent it is competing with other risky assets, such as equities and cyclical commodities. We view gold as a defensive inflation hedge and crypto as a risk-on inflation hedge,” they say according to a report in Business Insider.
Internal Competition Interfering
Another thing that is hurting crypto from being viewed as a safe asset by investors is the competition between the cryptocurrencies themselves. With as many as 10,772 different cryptos in existence today, the competition is clearly there and it is a tough one, especially outside the top 5.
What we’ve noticed in the gambling world is that players more often choose casinos offering Ethereum over those with only BTC due to high fees and long delays. Is this a trend or a hint of what’s to come?
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