While Ethereum was rolled out with the branding of being “The World Computer” capable of doing effectively anything that could be coded, the project arguably didn’t have a killer use case until recently.
Despite the limited use cases, the cryptocurrency still managed to become the world’s best-performing assets, rallying 28,000 percent from dollars to approximately $1,400 over the 13 months from January 2017 to the early-2018 peak.
It was such a strong rally that at one point in 2017, there were analysts expecting the market c apitalization of ETH to flip that of Bitcoin.
Fittingly, this event was dubbed the “flippening.”
Impressive, for sure, but a top industry chief executive has argued that Ethereum has an even “higher ceiling” to rally towards this time around, this bull run around.
The reason: the project actually has a solid use case now, and that is decentralized finance, better known as “DeFi.”
Introduction of DeFi bodes well for Ethereum, analyst says
While just two years ago, stablecoins and decentralized finance were not a prominent trend on Ethereum, they have become two use cases core to the blockchain over the past 12 months.
As it stands, $7.3 billion worth of U.S. dollar stablecoins like USDT, Circle’sUSD Coin, and Paxos Dollar,
According to Ryan Selkis, chief executive of crypto researcher and data provider Messari, this development, along with the development of this crypto sector in the future, gives “ETH a higher ceiling” to rally towards in the long run. Whether this was in reference to Ethereum’s performance against the dollar or against Bitcoin isn’t clear.
After the BTC bull run, I’ll start averaging into ETH again.
+ digital gold narrative will lead in this climate, but stablecoin progress / DeFi gives ETH a higher ceiling
Selkis’ comment somewhat contradicts that of Ryan Watkins, a researcher at his company who suggested in April that the invasion of Ethereum by Tether’s USDT and other centralized stablecoins may pose a long-term “threat” to ETH’s monetary premium.
Selkis asserted that the propagation of DeFi and stablecoins bolsters ETH’s long-term prospects. But as he and many other analysts have admitted, it’s time for Bitcoin — and primarily Bitcoin — to shine over altcoins. As the Messari CEO put it best:
“[The] digital gold narrative will lead in this climate.”
After all, Bitcoin is the only investable cryptocurrency that has safe-haven characteristics, the most notable of which being its 21 million coin supply cap enforced by halvings.
Raoul Pal — a former Goldman Sachs executive and the current chief executive of Real Vision — corroborated the sentiment that Bitcoin will outperform for now. The Wall Street veteran indicated in a number of recent interviews that if you truly believe cryptocurrency is the future, Bitcoin is automatically the most reliable bet, with Pal branding BTC the “call option” on a decentralized and digital economy.
Luke has had a long interest in financial technology, especially cryptocurrency and blockchain. With a Bachelors degree in Journalism and Media, Luke is dedicating his writing skills for the digital currency sphere.He can be contacted at firstname.lastname@example.org