After the transition to the second version of the Ethereum protocol, it could displace Bitcoin from the top of the asset-capitalization ranking. This view was presented by Messari analyst Ryan Watkins in the FinTech Today podcast.
“Bitcoin looks more attractive as a store of value — its monetary policy is predictable, and the network is secure. The second-largest cryptocurrency could challenge this after the transition to Proof-of-Stake”, the researcher said.
In the podcast, Watkins drew attention to the forthcoming change in the economy amid the transition to ETH2 with the introduction of the burning mechanism for a portion of transaction fees. He believes this could lead to a reduction in the market supply of coins.
“If the Ethereum network is more secure and the asset has a stronger monetary policy, what could Bitcoin offer?”, the analyst asked.
Watkins stressed that the blockchain of the second-largest cryptocurrency is built on a “massive and diverse” economy. The rapidly developing sector of decentralized applications will attract new users faster than Bitcoin, he added.
“At some point, the economy of the second cryptocurrency will absorb so much human and financial capital that it will be comparable to the GDP of certain countries. People will be able to earn a living in this ecosystem,” the expert suggested.
In December, Watkins forecast institutional investment into Ethereum thanks to the launch of futures for this asset on the Chicago Mercantile Exchange.
Earlier, Pantera Capital’s head suggested that Ethereum could outrun Bitcoin in growth, explaining this by the launch of Phase 0 of the second version of the protocol.
As noted, Messari analysts expressed confidence that the Ethereum network will remain out of reach for rivals thanks to the deployment of a Layer-2 solution based on Rollups.
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