By now, the role of Bitcoin (BTC) in portfolios is well established. Its tight supply limit in the face of an unprecedented increase in the money supply is prompting traditional fund managers to allocate funds for a BTC position and corporations to hold them as a reserve asset.
But what about Ethereum? Could it gain a similar position?
To date, interest in ETH is growing. The Grayscale Ethereum Trust has seen more than 40% increase from its nearly $ 800 million received in 2020 in its fourth quarter alone.
A number of ETH investment products have also entered the market over the past few months, including several exchange-traded funds in Canada. In fact, on February 8, the Chicago Mercantile Exchange, which caters primarily to institutional investors, listened to growing customer demand and launched ETH futures.
This growing interest can be seen in recent ETH numbers. Regardless of whether it is a year-to-date or 12 months, ETH has significantly outperformed BTC.
Is this why investors are increasingly interested in Ethereum? Or do they just see it as a cheaper means of storing value than Bitcoin?
A new report from CoinDesk Research examines the value propositions of both BTC and ETH, as well as various market structures and chain data.
While Bitcoin is increasingly seen as an emerging store of value, Ethereum is more of a technology game. For this reason, it is a riskier product and riskier bet, which explains its superiority.
However, everything is not that simple. Bitcoin is also a technology game, and Ethereum is also a potential storage of value.
Therefore, both assets have significant growth potential.
Yet, everyone's predominant narratives in the two cryptocurrencies continues. But Ethereum's technological development is now at a tipping point, progressing towards the transition to a blockchain with proof of ownership. Meanwhile, Bitcoin's disinflationary monetary policy is becoming increasingly evident, as fiat monetary stimulus shows no signs of easing and the growing supply of bitcoins moves into long-term storage.
