The two largest crypto currency unit Bitcoin and Ethereum the rivalry between them is decadent and long-standing. And this presents a ready-made and obvious dilemma for potential investors everywhere. JPMorgan analysts he made a number of explanations about why Ethereum is preferred over Bitcoin.
JPMorgan Analysts; Hold Ethereum Instead of Bitcoin
Although each currency has its own unique competitive qualities, the financial services firm JP Morgananalysts at <url> note that at a time when interest rates are rising, investors Bitcoin instead Ethereum he claimed that it would be better if he kept it.
In a recent report, the market strategist Nikolaos Panigirtzoglou a JPMorgan team of analysts led by him noted that high interest rates can be as harmful for “digital gold” Bitcoin as for traditional gold. However, the Ethereum blockchain, DeFi and NFTSince it is the powerhouse of, much broader use cases can continue to generate interest in the native token.
The quarantine-induced economic slowdown last year, which resulted in incredibly low interest rates and bond investments, led to an increase in cash flow and inflation. Bitcoin, developed in this scenario due to the perception that it is a hedge against inflation. However, now that central banks are moving away from providing this increased stimulus in an attempt to curb strong inflation, interest rates and bond yields may once again see an uptick.
Panigirtzoglou noted in the report:
“The increase in bond yields and the eventual normalization of monetary policy are expected as a form of digital gold Bitcoin it puts downward pressure on it, in the same way that higher real yields put downward pressure on traditional gold.”
PoW vs PoS
On the other hand, Ethereum, has been the main driving force behind a boom in decentralized financial activities and NFT trading, leading to the assumption that larger market forces cannot affect the token price too much. The report by JPMorgan analysts included the following statements;
“With Ethereum taking its value from its applications ranging from DEFI to gaming, NFTs and hard currencies, it seems to be less sensitive to higher real returns than Bitcoin.”
According to the report, another factor that works in the blockchain’s favor is its transition to more environmentally friendly technology. Bitcoin uses energy to print new tokens Proof-of-Work he has become increasingly angry over the past year for using his algorithm.
However, Ethereum, according to JP Morgan, will be fully operational by the end of next year, making its verification and security system much more energy efficient and a preferred choice for investors Proof-of-Stake he is in the process of switching to his algorithm.
“The increased focus of investors on environmental, social and governance investments has shifted attention from the energy-intensive Bitcoin blockchain to the Ethereum blockchain.”
However, the overall conclusion of the report indicated that both currencies are currently overvalued and are not a preferred option for institutional investors due to their high volatility.
A recent report by Kraken said the opposite, as it indicated that Bitcoin may still have a chance to reach higher levels before the cycle ends. In contrast, Ethereum’s strong performance is coming to an end as it faces stiff competition from rivals such as Cardano and Solana, leading to a decline in market dominance.