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Top Trader Mike Jenkins Explains Why He Is Buying More Ethereum (ETH)

In a recent video, top trader Mike Jenkins from Coin Bureau discusses the most common question these days: “Could ETH eventually overtake Bitcoin”? by looking at broader institutional adoption, protocol upgrades, and valuation metrics.

Previous Maxi Perspective & ETH Valuation

At the start of the video, the analyst cites a perspective from a Bitcoin Maxi – Arthur Hayes, who is also a co-founder of BitMEX.

According to the trader, Hayes wrote a piece that explains why ETH is so valuable: He wrote a blog post that looked at valuing ETH from the perspective of its Defi disruptive force. He looked at the performance of the banks over the past 10 years and explained how they have not being able to generate any returns for their shareholders. He then takes a look at ETH based on the amount of “revenue” being gas that has been used and compared that to a price.

“Basing it on a median price to revenue, if ETH was to even revert back to its mean ratio, it would imply a price of over $32k, and if it were to revert to its median, it’s over 9k. You can also use these median Price-to-Revenue numbers in order to determine what price ETH would be should it only capture a small percentage of traditional Finance’s market cap”.

Wall Street Adoption

According to the analyst,  Mathew McDermott, head of digital assets at Goldman, was more bullish on Ethereum than Bitcoin and that was mainly down to the utility that there is on the network.

“There are more use cases for it. As a commodities researcher, he holds the view that any “store of value” needs to have an alternative use case as well”.

He adds:

“Most decentralized finance applications are being built on the ethereum network, and most non-fungible tokens issued are purchased using ether. The greater number of transactions in ether versus bitcoin reflects this dominance”.

Moreover, a notable feature is that over the last 12 months, the ethereum price has far outpaced the bitcoin price, with ethereum adding around 1,000% compared to bitcoin’s 300%, even when the last week’s price crash is taken into account.

There was also an internal report from Goldman that said ETH was most likely to flip Bitcoin. Goldman has also started offering Ether futures & options to their clients.

Institutions Buying

Jenkins shares the most recent Coinshares Report showing that investors have been picking up products like ETPs and ETFs etc.

“In the week ending the first of June, funds flowing into Ether investment products was the highest of the lot. Then, just the week after we saw that the trend continued. Flows into Ether were almost 3 times all the other flows combined”.

The trader believes that it’s not only that they are buying the ETH to hold in their wallets. They are also staking this in order to earn those ETH 2.0 returns”.

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