Bill Gates discusses Bitcoin in 2018
They wrote: “In recent days, one of the more interesting developments in cryptocurrency markets has been the outperformance of ETH relative to other tokens.”
Noting that Bitcoin is “more of a crypto commodity than a currency,” experts stated that “ETH is the backbone of the crypto-native economy and therefore functions more as a medium of exchange”.
Many investors, including billionaire Mark Cuban, claim that Ethereum’s decentralised, open-source blockchain with smart contract functionality will trump Bitcoin because it is “easier to use”.
The price of Ethereum has hit all-time highs recently
Cryptocurrencies continue to interest investors
This allows for trusted transactions and agreements to be carried out without the need for a central authority, legal system, or external enforcement mechanism.
Bitcoin – the largest and most widely used cryptocurrency – does not currently offer support for complex smart contracts.
Analysts at JPMorgan asserted that “owning a share” of this technology “is more valuable” and therefore “ETH should outperform BTC over the long run”.
The report adds: “Both BTC and ETH markets experienced a comparable liquidity shock earlier this month which triggered a comparable de-levering of their perspective derivatives market in subsequent days.
Mark Cuban has backed Ethereum
“High-frequency cash basis pricing reveals a much smaller impact in ETH markets despite optically comparable net liquidations.
“Open interest data also suggests that the other side of these trades was easier to source.”
And they expect much of the same in the future.
The report continues: “Higher turnover on the public ETH blockchain means a noticeably higher fraction of those tokens can be considered highly liquid, further blunting the impact of futures liquidations.
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Ethereum has unique features
“In combination with the continued growth of decentralised finance and other components of the Ethereum-based economy, this suggests some technical but occasionally important bullish tailwinds versus bitcoin.
“ETH valuations may be less dependent on levered demand than BTC, a technical but occasionally important tailwind going forward.”
Britain’s Financial Conduct Authority (FCA) has previously warned against investing in crypto.
Bitcoin continues to be worth more
“Some investments advertising high returns from crypto assets may not be subject to regulation beyond anti-money laundering.
“Significant price volatility, combined with the difficulties valuing [Bitcoin] reliably, place consumers at a high risk of losses.”
Express.co.uk does not give financial advice. The journalists who worked on this article do not own cryptocurrency.
This post originally appeared on Daily Express :: Finance Feed