For some time now, the crypto community has been debating whether or not Bitcoin could permanently stay in the lead as the largest cryptocurrency in the world. The opinions are split, with some claiming that it is more than likely, due to the fact that it is the first cryptocurrency and the largest brand in the crypto space.
But there are also those who are claiming that Bitcoin can be overthrown and that Ethereum will be the one to do it. This opinion was recently supported by the CEO of Galaxy Digital, Mike Novogratz. Novogratz has grown to be known as a major Bitcoin bull over the years, but it would seem that he is beginning to change his perspective. Now, Goldman Sachs gave its own two cents, as well, seemingly echoing what Novogratz was saying only a week earlier.
Goldman Sachs Points Out Ethereum’s Potential
Ethereum has been the second largest cryptocurrency for years now, climbing so high up the ladder thanks to its revolutionary approach to crypto and blockchain. Before ETH came, blockchain was nothing but a distributed ledger — a list of transactions for the crypto industry. While Bitcoin still uses it as such to this day, Ethereum has shifted the attention from crypto to blockchain, pointing out all the possibilities that this kind of technology can offer.
It used it for storing data, developing smart contracts, designing dApps, offering token models for easy creation of new cryptocurrencies, and more. All of this made it climb to the position of the second-largest coin in the entire crypto industry, and start an entire trend of new projects functioning as development platforms, including the likes of EOS, TRON, Cardano, and many others.
Now, with Ethereum 2.0 arriving and promising to reduce transaction costs, improve its speeds, and offer to the stake, more and more people seem to believe that it can evolve further and surpass the world’s first cryptocurrency. Goldman Sachs seems to also count itself among those who believe this will happen, as mentioned in a recent research note.
The research note, published Tuesday, claims that Ethereum’s popularity is rapidly growing. As such, it is currently the top contender for overtaking Bitcoin as the most valuable crypto. However, with that said, the note also pointed out that there is rising competition among different coins to keep in mind.
Ethereum is not the only challenger to BTC
So far, Bitcoin has been the dominant digital currency with no real challengers. As of this latest bull run, however, it became apparent that this is no longer the case, and the original crypto now has a number of major competitors, including Ethereum itself, but also Binance Coin and Cardano, both of which skyrocketed earlier this year. Cardano’s series of upgrades from early 2021 pointed out that the project is ready to deliver the features and functionalities of Ethereum, only in a significantly more affordable and advanced way.
It is this very competition that acts as a major risk factor now, according to Goldman. The major US bank stated that Ethereum looks like the cryptocurrency with the highest real use potential. However, the competition between a handful of projects is preventing ETH from becoming a safe-haven asset.
Ethereum recently saw significant gains, while Bitcoin continued to trade sideways. The last 7 days allowed ETH price to go up by 13%, with many believing that the reason behind the surge is the upcoming London hard fork, which is expected to arrive in the next few weeks. Compared to other top assets, Ether us the largest gainer of the last week, with a market dominance of 19%.
However, Goldman also provided its insight regarding the crypto vs gold situation, noting that, even if Ethereum does overtake Bitcoin — neither of the two will be able to overtake gold. At least, not anytime soon. The reason for this is simply the nature of cryptocurrencies, which is far too risky for comfort. In this way, gold is competing with crypto in the same way as it competes with equities or cyclical commodities. They are all challenges, but none of them are as reliable at this point in time.