Institutional investors may now find Ethereum more advantageous than Bitcoin, according to Chris Kuiper, the Director of Research at Fidelity. Kuiper argues that legacy finance is becoming more knowledgeable about cryptocurrencies and is opening up to other digital assets beyond Bitcoin. One key factor that makes Ethereum attractive to investors is its maturation as a protocol. The switch to proof of stake and other developments have set it apart from Bitcoin and helped with diversification. Ethereum completed its merge upgrade a year ago, which shifted its consensus mechanism from proof of work to proof of stake. This upgrade has reduced electricity consumption, lowered Ether’s inflation rate, and prepared the network for future scaling. In contrast, Bitcoin upgrades less frequently and lacks a central Development team or roadmap. In a January 2022 report, Fidelity hailed Bitcoin’s decentralization as giving credibility to the scarcity of its underlying asset, making it an ultimate monetary good. However, Fidelity now highlights Ether’s potential as a form of money, especially due to its deflationary tokenomics after the merge. The analysts note that demand for Ether has not yet reflected the theoretically bullish burning mechanism introduced by the merge. Despite the advantages of Ethereum, Kuiper points out that it lacks the first-mover advantage and network effect of Bitcoin, and some people doubt its continued success due to its many changes in the past. Finally, the analysts mention that beyond Bitcoin and Ethereum, there is limited institutional demand for other cryptocurrencies..
#Ethereum #Appeal #Institutional #Investors #Fidelity
#Ethereum #Appeal #Institutional #Investors #Fidelity
