US giant bank JPMorgan has laid out the primary reasons why Ethereum is superior to Bitcoin.
JP Morgan Analyst Nikolaos Panigirtzoglou says that the second-largest blockchain is leading the way in decentralized finance (Defi). According to the data from DeFiPulse, the total value locked in Ethereum-based DeFi projects is now over $106 billion.
Coupled with non-fungible tokens and stable coins Ether has more uses cases than BTC.
Panigirtzoglou says that Bitcoin is an insurance against inflation and has benefited from the low-interest rates environment that reveals the dangers of the banking system. But, now that central banks are beginning to cut their support, Bitcoin may be affected like gold due to the rising yields on bonds:
“The rise in bond yields and the eventual normalization of monetary policy is putting downward pressure on bitcoin as a form of digital gold, the same way higher real yields have been putting downward pressure on traditional gold.
With Ethereum deriving its value from its applications, ranging from DeFi to gaming to NFTs and stable coins, it appears less susceptible than bitcoin to higher real yields.”
Ether according to Panigirtzoglou’s is not as susceptible to environmental issues due to its next upcoming proof of stake (PoS) mechanism.
“The greater focus by investors on [environmental, social and governance investing] has shifted attention away from the energy-intensive bitcoin blockchain to the Ethereum blockchain,”
The US bank believes that the two major cryptocurrencies are trading over their fair values. JPMorgan Says Bitcoin Fair Price Is $35,000