Ex Goldman Sachs manager: Ethereum could overtake Bitcoin in 10 years
Bitcoin has been the clear market leader in the crypto sector since its launch in 2009. Its market capitalisation clearly outshines all other crypto assets.
Market data shows that Bitcoin has a market capitalisation of $334 billion, while Ethereum is closer to $62 billion.
But a leading Wall Street veteran working in this field believes this could change in the coming years. He says to Bitcoin Secret that Ethereum does have the potential to exceed BTC’s market capitalization in the coming decade.
Here you can read how he comes up with this.
Is Ethereum pushing Bitcoin off the throne?
Since Ethereum came within a few dozen percent of BTC’s market capitalisation in 2017, the term „flipping“ has become popular in the industry. It means that one coin overtakes the other and surpasses it in terms of market capitalisation.
Some proponents of Ethereum believe that the crypto currency will eventually outperform the market capitalisation of BTC. The idea is that because BTC has a single use case, namely to be an asset store and a medium of exchange, Ethereum’s multifaceted nature should, over time, make it more widely accepted.
Raoul Pal, CEO of Real Vision and a Wall Street veteran, recently backed this idea.
In a detailed Twitter thread, he stresses how there are trillions and even quadrillions of dollars of financial applications that can be built on crypto-currencies.
Where Bitcoin will take the lead as security, Pal thinks that Ethereum will be the layer where transactions are processed, debts are issued, assets are tokenised, and so on and so forth:
„My guess is that BTC is a perfect layer of security, but ETH could have a larger market capitalisation in 10 years for the reasons mentioned above. Money and securities are only the base layer. Everything builds on them. The value retention is the security, the trust layer and the exchange of values is greater“.
To translate this into terms from real life: There is an estimated M2 money supply in the USA today worth $19 trillion. While this sounds like a lot, there are currently trillions of dollars worth of derivatives built on this capital base.
Pal seems to suggest that BTC will conquer the monetary base component of finance, while ETH could take over the derivatives and the settlement level.
He is not the only one who thinks so
Chris Burniske, Placeholder Partner, has indicated that this transition may take place earlier than perhaps most people realise.
The analyst comments that BTC and ETH are likely to „run“ each other to a trillion-dollar valuation in the coming years.
He believes that Ethereum’s burgeoning DeFi economy will give it the fuel to gain relative value over BTC:
„In the meantime, $ETH will be the new kid on the block for the mainstream – expect a rush of excitement that comes with this realisation. Given the outperformance of $ETH versus $BTC over its lifetime (see graph below), not to mention the lower network value and strong on-chain economy, I see all the reasons why $ETHBTC will outperform ATHs“.