In a recent report published by English bank Standard Chartered, analysts structurally value Ethereum at “USD 26,000- 35,000” while also predicting that Bitcoin will reach 170k.
Standard Chartered: Why ETH beats Bitcoin for Investment
The financial service giant’s report, titled “Ethereum Investor Guide,” explains the network’s value proposition while comparing and contrasting it with the Bitcoin network. Based on their research, analysts Geoff Kendrick, Christopher Graham, and Melissa Chan state that “Structurally, we ‘value’ Ethereum at USD 26,000- 35,000”.
However, they also recognize that Ethereum will likely not reach that price until Bitcoin begins trading “at the top of our valuation range,” which they place at $175,000.
That said, the analysts ultimately expect Ethereum’s market cap to “catch up” Bitcoin’s. They make this prediction based on measures of the industry market caps which they envision each network replacing:
“For ETH, we compare value of global banks against the value of global credit-card companies to establish ETH’s value relative to BTC. Based on this, we estimate a potential value for ETH of USD 35 000 (10X the current level).”
The report also recognizes a “much wider set of use cases” for Ethereum. While Bitcoin is regarded as “Digital Gold,” ETH is noted for being able to support smart contracts, DAOs, NFTs, Stablecions, DeFi, and more. Combined with the upcoming ETH 2.0’s increased functionality, scalability, and move away from proof-of-work, Standard Charter deems Ethereum “a better buy than BTC over the medium term.”
ETH vs. Bitcoin: Higher Risk, Higher Reward
Despite their favorability for Ethereum, the bank also views investment in the network as a greater gamble overall.
“We think the current price reflects the relative complexity of ETH (versus BTC) and the uncertainty around ETH’s development. In other words, while potential returns may be greater for ETH than for BTC, risks are also higher.”
Indeed, such fears are well-founded in the current price movements of ETH and BTC. While Ethereum’s gains had been sizeably greater than Bitcoin’s over the past two weeks, it has also experienced lower lows. After the market-wide crash yesterday, while Bitcoin dropped by as much as 15%, Ethereum dropped over 20% in value at one point. This price drop was accompanied by a steep rise in the cost of transaction fees on the network.