Bitcoin’s utility as an inflation hedge has been a big push for the adoption of the cryptocurrency by investors. Ethereum, on the other side is rapidly rising to be the crypto of choice for investors who want to hedge against inflation. The digital asset’s performance over the past couple of years has proven that it is a strong contender for bitcoin given the year-over-year returns recorded.
Ethereum, which was only five years old when it began, has since grown to be one of the most valuable assets on the planet. Ethereum was just recently named the 15th biggest asset worldwide, surpassing all major banks. Galaxy Digital CEO Mike Novogratz commented on the reasons why Ethereum is outperforming pioneer cryptocurrency Bitcoin.
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Ethereum is a Technology Player
Novogratz said that Ethereum’s growth was due to its technology, which Novogratz believes is a great point for investors. Ethereum is one of the most popular cryptocurrencies, particularly with the introduction of decentralized finance (DeFi). Sitting down with CNBC for an interview on Wednesday, the CEO pointed out that Ethereum’s offering is larger than an inflation play.
In contrast to this, bitcoin’s biggest offering still hinges on its being an inflation bet. Investors love the deflationary nature of this digital asset, which currently has 21 million coins in supply. Novogratz said that bitcoin’s appeal begins to fade when it is compared against devalued currencies like the US dollar.
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Ethereum is not just an inflation betting platform. It also provides innovative technology in the blockchain sector. “People see Ethereum as a technology bet,” Novogratz noted.
It serves a longer-term purpose than bitcoin because investors have chosen to bet on it rather than using it as an inflation hedge. It has continued to steal market share away from bitcoin, which is why it continues to be the most popular cryptocurrency.
Technology Trumps Inflation
Investors are increasingly concerned about the Fed’s constant money printing. Experts call for an immediate halt to Fed money printing that is driving up inflation rates. However, the warnings and pleas of experts have not been heard. Investors now have to look to crypto investments, like bitcoin, that can hedge inflation.
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Bitcoin bull and crypto supporter Mike Novogratz sees all of the money printing working out in the favor of cryptocurrencies in what he calls a “monster fourth quarter”. But he didn’t limit the expected bull market in crypto to cryptocurrency alone. Novogratz believes that the stock markets will continue to rally.
Featured Image from FT.com. Chart by TradingView.com