If ‘Ethereum is already more popular than Bitcoin,’ what are institutions waiting for
Since Bitcoin’s rally last year, high-level financial institutions have placed a lot more importance on the cryptocurrency’s value. However, while companies like Microstrategy and Tesla have gone big on the top digital asset, Ethereum is still well behind in making that cut.
Companies like Coinbase may be changing that narrative, however, with the NASDAQ-listed cryptocurrency exchange recently announcing plans to invest millions into buying Ether, among other alts.
Even so, other companies without any crypto-allegiances aren’t really adding ETH to their balance sheets with any rush. This scenario might soon change though, according to Ryan Selkis.
During a recent podcast, the CEO of Messari opined that Ethereum will soon become popular with institutions. Why? Well, because there is a half-life to new crypto-assets. He explained,
“The first asset that almost all new buyers are going to accumulate for their treasury or as part of an investment strategy is probably going to be Bitcoin and then you know ether is going to be number two.”
It also comes down to their value propositions, according to the exec, which is of digital gold v. token interest in the “financial Internet.” In that sense, “Ethereum has real transaction volumes, real applications that they’re running on top of it,” he added.
Since both networks are top of their class in their respective fields, there might come a time in the future when both assets reach an equal market capitalization. Noting that such a scenario would be interesting, Selkis said,
“You’ll have Bitcoin and Ethereum maximalists at each other’s throat and arguing in perpetuity over basically a false contract and in a false debate because it’s two completely different things that happen to be the same size.”
It would, however, make Ethereum “a much better trade,” he noted.
To many proponents, Ethereum flipping Bitcoin, the “flippening,” is just a matter of time. However, according to Selkis, the same shouldn’t be assessed via comparisons of market cap and price since they are “most irrelevant metrics.”
“Even on Coinbase, we saw more trading volume on Ethereum last quarter than on Bitcoin and one could argue obviously with transaction volume or any other number of metrics that Ethereum is already more popular than Bitcoin.”
Ethereum is currently the world’s most used blockchain, and it is because of the thousands of applications and platforms that have been built on top of it. Since payment on the network is carried out through its native token, ETH transaction volume has naturally been higher than BTC. Most users actually prefer the latter as a store of value.
Nevertheless, the analyst was not all praise for Ethereum. While ETH 2.0 looks to be just around the corner, Selkis believes its transition to Proof-of-Stake could still face “execution risk.” He added,
“I don’t think that Ethereum is kind of the definitive winner in settling decentralized finance transactions or settling any type of value transfers, whether it’s NFTs or currencies.”