According to a Morgan Stanley analyst, Ethereum (ETH) may eventually outpace Bitcoin (BTC) by market cap. In his recent research report, Denny Galindo discusses how the leading altcoin project can do this. We have compiled the details of the report for the readers of Kriptokoin.com…
How can Ethereum reach a larger market cap than Bitcoin?
Morgan Stanley strategist Denny Galindo argues in a recent study that Ethereum is sufficiently different from other cryptocurrencies that it is considered a separate investment from Bitcoin. According to analysts at US newspaper Barron who reviewed the report, Galindo’s statements reveal how Ethereum, instead of Bitcoin, is now linked to broader economic activities beyond just payments and storage, such as NFTs and decentralized applications (DApps). According to Morgan Stanley analyst, multiple use cases of Ethereum could make the market value of ETH greater than Bitcoin. Barron analysts examining Galindo’s report include the following statements:
Galindo simply lists the cases for and against while pondering the question of ‘Can Ethereum fit in a portfolio?’. Ethereum has more potential benefits than Bitcoin, thus potentially a larger market, creating a huge market for DApps.
The correlation structure of bitcoin and altcoin markets
According to Galindo’s analysis, Ethereum, ETH’s stock market correlation is roughly twice that of BTC, noting that traditional may be merging with financial markets:
As of December 2018, Ethereum and Bitcoin have 0.70 anchors, while Ethereum is almost twice as tied to the S&P 500 at 0.26, versus 0.14 for Bitcoin… the stock of a portfolio can potentially increase stock correlation.
If the correlation value Galindo mentioned is close to 1, it indicates that the two cryptocurrencies are highly correlated. In his analysis, Galindo also states that he feels that cryptocurrency is permanent:
We make no recommendations on whether to buy or sell Ethereum… We do not expect cryptocurrencies to disappear anytime soon… The sooner we learn, the better we can see how cryptocurrencies might fit in certain conditions. .
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