Goldman Sachs (NYSE:GS) believes Ether (CRYPTO: ETH), the cryptocurrency associated with the Ethereum blockchain, could become the dominant digital store of value in the cryptocurrency sphere.
In a note to clients (h/t BI) on Tuesday, the Wall Street banking giant said that Ethereum’s “smart contract” decentralized manner and its utility in being the platform of choice for the majority of De-Fi (decentralized finance) protocols, give it the potential to overtake Bitcoin (CRYPTO: BTC) in the coming years.
According to Goldman, BTC’s perception as the dominant digital store of valued comes from the coin’s “stronger brand” which is driven by its first-mover advantage. However, the note suggests that when compared to Ether, Bitcoin — the crypto held about 90% of the crypto market value in 2013 — lags in block time speeds, transaction speeds and level of functionality.
In its note, Goldman also referred to both cryptocurrencies as a risk-on inflation hedge and argued that gold is a superior store of value to digital assets.
“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 note said, while highlighting the fact that this rivalry “among cryptocurrencies is another risk factor that prevents them from becoming safe-haven assets at this stage.”
Bitcoin was last trading at $32,670, down about 2% on the day, while Ether traded 2.7% higher at $2,177. Market Cap: $612 billion, $253 billion, respectively.