Ethereum has proven itself to be a force that cannot be ignored, and the big bank JPMorgan Chase agrees with this. In terms of performance, Ethereum outperforms its rival Bitcoin, although the latter is still the most valuable cryptocurrency in the field. However, if history shows any signs, then Bitcoin may not be ahead for too long.
Analysts at JPMorgan Chase recently released a report on cryptocurrencies and their potential. Although the note acknowledges the capabilities of Bitcoin, it also puts Ethereum ahead of the leading cryptocurrencies in the coming years. The report’s arguments are based on the utility of these two assets. Although Bitcoin is good for its monetary policy, it turns out that Ethereum is better.
Related Reading | Why this cryptocurrency billionaire abandoned Ethereum
Invest in Ethereum
The JPMorgan Chase report outlines how Ethereum has proven to be a better choice than Bitcoin in the context of long-term errors. Bitcoin may still be the most valuable cryptocurrency, but as interest rates climb, Ethereum may eventually perform better.
Analysts said: “The rise in bond yields and the final normalization of monetary policy are putting downward pressure on Bitcoin as a form of digital gold. Similarly, higher real yields are also putting downward pressure on traditional gold. “
ETH recovers above $4,300 | Source: ETHUSD on TradingView.com
This is because as interest rates and inflation rates rise, more investors will flock to decentralized finance (DeFi) agreements, which offer interest rates that are more attractive than traditional finance. Given that most of these DeFi protocols are built on the Ethereum blockchain, it will only promote more adoption of digital assets and provide them with more room for growth than Bitcoin.
In the explanation, JPMorgan Chase also pointed out the emerging NFT, gaming and stable currency parts of the market. When investing in cryptocurrencies, this makes it “safer” than Bitcoin, as cryptocurrencies are notorious for their volatility. The report states that as interest rates rise, its potential utility should be able to help it maintain its value.
“As Ethereum gains value from its applications, from DeFi to games to NFTs and stablecoins, it does not seem to be affected by higher real yields like Bitcoin.”
Outstanding performance in the future
Analysts at the world’s leading bank JP Morgan Chase also pointed to other reasons why Ethereum may eventually become a better investment option than Bitcoin. One of them is that altcoins have consistently outperformed Bitcoin. When the two digital assets are compared in terms of performance, the figures for 2021 alone show a big gap.
Compared with Bitcoin’s 96%, Ethereum has grown by more than 500% this year. If the asset maintains this speed, it is likely to exceed the market value of Bitcoin in the next five years, while bringing higher returns to its investors.
Within five years, Ethereum has grown to about half of Bitcoin’s total market value. The digital asset is worth more than 500 billion U.S. dollars, surpassing giants such as Visa, MasterCard, and JPMorgan Chase, and ranks 15th in the world’s most valuable assets.
Featured image from Coingape, chart from TradingView.com