Ethereum 2.0 and its move towards being more functional as a ‘world computer’ is well on its way and comes with much excitement through the cryptocurrency space. However, its impact is still being speculated on with one analyst from Mesari believing this upgrade could see it overtake Bitcoin.
Senior research analyst at Messari, Ryan Watkins, predicts that Ether could overtake Bitcoin as the top crypto asset once its Eth2 overhaul is complete.
Bitcoin’s position of dominance in the cryptocurrency space comes from its sim0plicticy, popularity and experience. However, in terms of growing innovation, it is probably seen as far behind Ethereum and its move to PoS.
The rumblings of ETH 2.0 have already had an impact on the price of the token as it has climbed to new all time highs in recent weeks and months, but does this mean it has the power to become a trillion dollar asset?
Appearing on YouTube show FinTech Today, Watkins noted that while he does not know “if or when” Ether will flip Bitcoin, he does believe Ether could emerge as the leading crypto asset in the future, due to ETH 2.0, stating:
“The selling point of Bitcoin over Ethereum as a store of value asset boils down its monetary policy being very predictable and the Bitcoin blockchain being very secure. I think that with the shift to Eth2 and to proof-of-stake, Ethereum may actually potentially be more secure than Bitcoin.”
Furthermore, Watkins also said Ether’s changing underlying economics amid the transition, highlighting expectations that Ethereum’s forthcoming burn mechanism will result in Ether being destroyed at a rate exceeding the creation of new supply.
“Ethereum’s monetary policy will actually change in Eth2 so that it actually won’t just be just be less inflationary than Bitcoin, it would actually be deflationary. So then, every year, there is actually less and less Ether in existence because it’s being burnt.”
A new economy
While Ether is not supposed to be a financial tool in the same vein as Bitcoin, Watkins also noted the economy that is growing on this blockchain.
“At a certain point, the economy of Ethereum begins to attract so much capital, both human capital and financial capital, that it is actually a force in the global economy,” he said. “The GDP of Ethereum is actually rivaling many large countries.”
“People can earn a living in this economy,” he added.