Ether’s actual use cases make it the most valuable digital store of value over the next few years, Goldman Sachs stated in a Tuesday note.
According to the note, ether is deemed the cryptocurrency with the greatest real use potential because Ethereum (the platform on which it is native digital currency) is considered the most popular platform for developing smart contract applications.
According to Goldman, this means that ether could eventually surpass bitcoin in popularity as the most popular cryptocurrency. Although bitcoin is the most well-known cryptocurrency due to its superior first mover advantage and other advantages, ether lacks many of the commonly-cited use cases. This is partly due to its slow transaction speeds of seven transactions per second.
However, regardless of which cryptocurrency is the most popular, neither will be capable to overtake gold anytime soon. Goldman stated that despite its volatility, it doesn’t make it a competitor to , a safe haven investment like gold.
“Gold is competing against crypto in the same way it is competing alongside other risky assets like equities or cyclical commodities,” Goldman explained. Goldman said that gold is a defense inflation hedge while crypto is a risk-on inflation hedge.
Its ability to be considered a safe asset class by investors is being hampered by the competition among crypto assets.
Goldman stated that ‘this competition among cryptocurrency is another risk factor that prevents it from becoming safehaven assets in this stage.’ According to data from CoinMarketCap, there were 10,772 different cryptocurrency in existence as of Tuesday afternoon.