Why This “Whale” Thinks Ethereum Could Soon Be “Better Digital Gold” than Bitcoin
Bitcoin and Ethereum are rarely compared beyond when discussing market structures and price trends, with their underlying fundamental values being wildly different.
While Bitcoin is seen as a store of value and a “digital gold,” Ethereum is widely thought to be more of an ecosystem backbone. The vast majority of the actively used crypto space is run through the Ethereum blockchain.
The gap between the two cryptocurrencies in terms of underlying similarities may begin shrinking in the near-term, however, as one early Ethereum investor, who is a purported “whale,” is noting that two changes to the ETH network could soon make it a “better digital gold than BTC.”
These comments came about during a discussion regarding the lack of institutional involvement in ETH, which he believes will soon change.
He is specifically pointing to Ethereum Improvement Proposal 1559 and the Proof-of-Stake consensus system incorporated under ETH 2.0 as reasons why the token will soon inherent gold-like properties.
These two factors will help ETH become scarcer and have negative inflation, giving rise to a serious price increase in the mid-term.
Ethereum Underperforms Bitcoin as Institutions Drive Ongoing Rally
It is widely thought that institutions and “smart money” are driving the ongoing Bitcoin rally.
The cryptocurrency has been caught within an intense uptrend that has allowed it to stabilize around $18,000. The selling pressure here has proven to be quite intense, but it appears that bulls are prevailing.
While BTC is just a stone’s throw away from setting fresh all-time highs, Ethereum is still stuck below its 2020 highs of $490 and has a long way to go before reaching its 2017 highs of over $1,000.
Its underperformance of BTC may be coming about due to institutions driving this Bitcoin upswing and buying the crypto because of the “digital gold” narrative.
ETH Whale Claims It Will Soon Flip Bitcoin as the Superior Digital Gold
Tetranode, a supposed Ethereum whale who acquired his position around $1.00, explained in a tweet that he believes the negative inflation that will come about as a result of PoS issuance and EIP-1559 will allow ETH to flip Bitcoin as a superior digital gold.
“It will be better digital gold than BTC. EIP-1559 + only PoS issuance… good chance effective inflation is negative. Institutions don’t like uncertainty, they want to see it live, so they will have to wait for $10,000 ETH… just like how they waited for $10,000 BTC.”
If these network changes ignite a narrative regarding Ethereum being a store of value, it could see large inflows from institutions who want to diversify across multiple digital assets.
Featured image from Unsplash. ETHUSD pricing data from TradingView.