While the Bitcoin vs. Ethereum debate rages on between early investors and maxis, Standard Chartered, a London-based bank, appears to have taken a stance.
In a recent research note, the bank stated that Ethereum could outperform Bitcoin in the coming years, even stating that it ‘structurally’ values the world’s second-largest cryptocurrency by market cap at more than $35,000.
“We value Ethereum structurally at USD 26,000-35,000…
“We see the Ethereum-Bitcoin cross doubling to 0.161, a level at which ETH’s market cap would equal BTC’s,” the bank’s researchers wrote, adding:
According to Standard Chartered, ‘this logic’ underpins its absolute valuation estimates for Ethereum versus the US dollar as well as its relative valuation against Bitcoin.
In fact, the bank stated that, while Bitcoin’s valuation could be compared to the value of credit card companies, Ethereum’s valuation could be compared to the total market cap of all global banks.
Ethereum is gaining traction among institutions.
From its early ‘sound money’ narrative, Ethereum has evolved into an ecosystem that includes Web3 dApps, non-fungible tokens (NFTs), smart contract-based financial services, decentralized finance (DeFi), and much more.
The upcoming ETH 2.0 upgrade strengthens Ethereum’s position in the cryptocurrency market by transitioning it from a ‘proof-of-work’ mechanism to a ‘proof-of-stake’ consensus design. As a result, it will become a more environmentally friendly blockchain in the coming years, a narrative that will help to mitigate the negative press that has plagued Bitcoin over the last year (for its supposedly climate-damaging nature).
It’s a shift that even Standard Chartered has noticed. “The change has obvious environmental benefits,” the researchers wrote, adding that “it eliminates the need for excessive computer power to be used in ‘mining.’” The transition from [proof-of-work (PoW)] to [proof-of-stake (PoS)] is expected to take place gradually during H1 2022.”
Meanwhile, Standard Chartered did point out that other ecosystems existed and could compete with Ethereum. “Separate ecosystems already exist and may continue to compete with Ethereum in specific areas… Furthermore, the researchers wrote that “regulatory concerns related to Ethereum will be very different from those related to Bitcoin.”
“While potential returns for ETH may be higher than for BTC, risks are also higher,” they concluded.