The price of Ethereum may surpass that of Bitcoin. This is the view of Messari’s Ryan Watkins, who spoke about it on the Fintech Today podcast.
During the broadcast, when asked whether Ethereum may one day be more valuable than Bitcoin, the analyst replied:
“I think it’s possible that one day Ethereum will be worth more than Bitcoin. I don’t know if and when that will happen but I think it’s possible”.
According to Ryan Watkins, what will make Ethereum stand out enough to grab attention is the move to Proof of Stake, which is foreseen in Ethereum 2.0.
This will make the Ethereum blockchain more secure than that of Bitcoin. Furthermore, with the transition to version 2.0, there will also be a change in Ethereum’s monetary policy which, according to Messari’s analyst, will not only become less inflationary than Bitcoin, but even deflationary. Over the next few years, there will be fewer and fewer ETH because they will be burned, so the token supply will be reduced.
The economics of Ethereum will push the price to be worth more than Bitcoin
What also suggests that Ethereum may soon surpass Bitcoin in price and usefulness is its unique ecosystem for building applications to create digital goods and services.
Moreover, Bitcoin is bound to run into difficulties. Ryan Watkins cannot imagine that Bitcoin will be used as a means of payment and accepted by governments as if nothing happened. On the contrary, governments themselves might obstruct it for fear of losing their monetary sovereignty. Ethereum, on the other hand, does not aim to become a circulating currency. Nonetheless, it has its own economy, which is explained as follows:
“Ethereum is a bit different. The way Ethereum becomes a currency is not because it will be adopted by countries as a currency, but because it is building its own economy (…) and in this economy, there are financial institutions, technological institutions, art, and lots of things that people can do. These things produce value, people can make a living in this economy. So at a certain point, the Ethereum economy will start to attract so much capital, both human capital and financial capital that it will be a force in the global economy”.
In addition, thanks to stablecoins, which will be used to hold funds, Ethereum will also be able to solve the problem of market volatility.
For all these reasons, Ryan Watkins concludes:
“Ethereum is winning not because everyone is adopting it but because there is a lot of demand to pour money into its economy, people need Ether to spend money in its economy, it’s like if you go to a country and you need its currency. That’s the scenario that I think becomes possible and that will make sure in my opinion that at that point Ethereum will win and be worth more than Bitcoin”.
Ultimately, according to the Messari analyst, Bitcoin is destined to remain in a niche competing with gold and other assets, while Ethereum will prevail.