Ethereum, the world’s second-largest cryptocurrency, recently received support from Goldman Sachs, one of the leading American investment banks. In a research note on Tuesday, the New York-based investment bank mentioned that the growing popularity of Ethereum makes it the top contender to overtake Bitcoin as the most valuable digital currency.
According to a report published by Business Insider, citing the latest research note of Goldman Sachs, Ethereum could overtake bitcoin as the dominant digital store of value in the coming years. However, Goldman Sachs believes that the rising competition among different cryptocurrency assets including Ethereum, Bitcoin, Binance Coin and Cardano is a major risk factor.
“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,” Goldman Sachs mentioned in the research note.
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In terms of price action, Ethereum saw significant gains during the last 7 days. The cryptocurrency jumped by more than 13% within the last week, the highest percentage gain among the top 5 digital assets. Currently, ETH has a market cap of more than $275 billion and a market dominance of nearly 19%.
Gold’s Competition with Ethereum and Bitcoin
Goldman Sachs mentioned that despite the latest surge in popularity of cryptocurrency assets like Ethereum and Bitcoin, neither will be able to overtake gold anytime soon. The bank highlighted the risky nature of digital currencies. “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,” the research note mentioned.
Ethereum 2.0, the network upgrade of ETH, now has more than 6 million staked ETH with a total value of nearly $15 billion.