According to Barron's, Morgan Stanley Wealth Management has recently introduced a 20-page primer on ether. The bank believes it will help clients to choose an appropriate digital asset.
The report "Cryptocurrency 201: What Is Ethereum?" prepared by investment strategist Danny Galindo highlights several striking advantages of ether versus other cryptocurrencies. The bank considers it a separate investment from well-known bitcoin.
"We make no recommendation whether to buy or sell ether. We do not see this asset class disappearing. The faster we can get educated, the faster we can understand how cryptocurrency may fit into some, though not all, portfolios," the report read.
Ether is the second-largest cryptocurrency after bitcoin. New coins are created by the blockchain network. Ether has two distinguishing features. "One, the currency is decentralized, created by anyone who sets themselves up with computers to mint coins using Ethereum rather than by a central bank. And, two, it promotes digital "scarcity," by making some piece of code, such as a file, uniquely identifiable and therefore able to be assigned as property to someone," Galindo noted.
Currently, the Ethereum network is expanding faster than Bitcoin. It managed to attract the largest number of users thanks to the creation of an emerging class of software programs called decentralized applications, or "Dapps." This service works as an app store without a particular owner. As a result, it boosts the operation of decentralized finance applications, or DeFi, e.g. banks, exchanges, and mutual funds.
The decentralized ether blockchain also facilitates the emergence of popular innovative services such as non-fungible tokens (NFT). They are copies of digital works such as paintings, audio, and video products that can be collected and sold.
The main advantage of ether is the expansion of the market for Daaps whose potential exceeds the capabilities of bitcoin. As for the cons, Morgan Staley points out regulatory issues and high volatility. The bank also warns about the risks when working with cryptocurrencies. Traders should be very cautious if they want to add crypto to their portfolios.
