Deutsche Bank: Ethereum is digital silver
Marion Laboure, senior economist and market strategist at Deutsche Bank, believes that precious metal storage for modern digital society is outdated and has announced her imminent replacement.
Whether it is just the published opinion of Ms. Laboure or a coordinated position of Deutsche Bank remains open. In any case, Ms. Laboure has an assessment of the crypto market in the form of a 99-second video and added some written comments to this video.
History shows that people have “always had a strong willingness” to store their money in an asset that “differs from the daily work processes of governments and authorities,” said the chief economist.
“Until recently, gold was that primary asset. So I could imagine that Bitcoin is a kind of digital gold in which people can also store their values. “
In a written statement, the German banker added that Bitcoin was “clearly the pioneer and the most traded cryptocurrency”. Its market capitalization is many times larger than that of Ethereum, number two behind the top dog, but which offers many applications and use cases, such as a platform for decentralized finance (Defi) and the revolution in the digital art sector, the non-fungible token (NFT ). In this respect, if Bitcoin were to be called “digital gold”, Ethereum would definitely have to be called “digital silver”.
The precious metal analogy is not entirely new. In January 2021, JP Morgan’s investment bankers also made a comparison between the world’s most important cryptocurrency and the world’s most valuable precious metal. They even went so far as to assume that there would be competition between Bitcoin and gold, which the digital natives would in all likelihood decide in favor of the digital asset in the sense of the “displacement of gold”.
What is new about the comparison, however, is that a silver analogy has now been added to the gold analogy. Analysts had always avoided this for good reasons. Because the second largest crypto currency in the world has a market capitalization that is only about half the size of Bitcoin. The attractiveness of Ethereum is mainly explained by the ability to offer significant added value via smart contracts beyond the pure currency aspects.
However, if we wanted to derive the claim to be called “digital silver” from this, there would be several applicants for this award. Smart contract platforms, for example, also offer other crypto currencies from the top ten, namely Cardano, Binance with its Smart Chain, Solana and Polkadot. It is currently not possible to make a clear assessment of which of these blockchains will make the race in the defi and NFT sectors. Currently this is Ethereum, but technically Cardano or Solana would even be better suited.
