Technicians at Goldman Sachs predict that no cryptocurrency could surpass gold as a store of value. They consider that competition between different cryptocurrencies is detrimental to the ecosystem.
Investment bank Goldman Sachs recently made a prediction about Ether (ETH), the native cryptocurrency of Ethereum. They said that the crypto asset could surpass Bitcoin (BTC) as a store of value in the coming years.
The firm stated that the cryptocurrency seems to have the best potential for actual use. Besides, they believe that it is the most popular for developing applications based on smart contracts.
According to the technicians from the financial company, Ether could surpass Bitcoin as the currency with the highest market capitalization.
Goldman Sachs noted that Bitcoin is the most popular cryptocurrency, but they argued that it has fewer uses than ETH. The original purpose of the Ethereum network was to execute smart contracts, but Bitcoin seeks to be a peer-to-peer electronic cash system.
Neither Ether nor Bitcoin Can Surpass Gold as a Store of Value
Goldman Sachs experts predicted that neither cryptocurrency could surpass gold as a store of value in the short term. However, they recognized that gold and cryptocurrencies could help fight inflation.
The technicians explained that gold competes with both cryptocurrencies and other risk assets such as stocks and commodities. Additionally, they said that gold is a defensive hedge against inflation while cryptocurrencies are a risk hedge against inflation.
The company also highlighted that competition was harming the possibility of considering cryptocurrencies as a secure asset class in which to invest.
Ether Rally Has Already Reached 215%
The price of Ether recorded a 3% increase due to comments from Goldman Sachs. So far this year, the revaluation of the cryptocurrency has been around 215%.
The cryptocurrency of the Ethereum network is one of the most popular altcoins that have surpassed Bitcoin itself this year.
Although its institutional adoption is not as strong as Bitcoin’s, its technology attracts a lot of interest.
For example, the Bank of Israel recently announced that it is studying the use of the Ethereum network. They want to use it for internal testing with their CBDC, the digital shekel.
The European Investment Bank (EIB) announced that they would launch a EUR 100 million digital bond based on the Ethereum network.
Goldman Sachs Considers Bitcoin an Investment Asset
Investment firm Goldman Sachs has expressed its opinion on different crypto assets on previous occasions. In May, its head of digital assets, Matthew McDermott, stated that they consider Bitcoin an investment asset.
However, he highlighted that the cryptocurrency poses risks due to its relative youth and the adoption phase it is going through.
The executive noted that Bitcoin does not behave like other assets, considering the analogy with digital gold. He said that the pioneering cryptocurrency is performing more like risk assets.
Ether is currently trading at around USD 2,140 and has lost about 0.3% in the last 24 hours. That brought its market capitalization to above USD 249 billion, according to data from CoinGecko.
By Alexander Salazar
