By
Mayowa Adebajo
April 24th, 2024
Standard Chartered also said that Ether has more functionality and may potentially replace Bitcoin as the world’s most prominent crypto.
Standard Chartered says it is more bullish on Ether than Bitcoin. In its first crypto report released on Tuesday, the British banking giant said that it expects the value of both assets to rise substantially. However, Standard Chartered believes that Ether will see more growth on a relative basis, rising up to 10x its current value.
In contrast, the report claims that Bitcoin might only manage a relative growth up to 3x from its current price. Despite Standard Chartered’s more optimistic stance on Ether, the bank says the token carries more risk.
Head of Standard Chartered’s global research team, Geoffrey Kendrick, pointed out the key differences between Ether and Bitcoin. In his analysis, Kendrick explains that the functionality potential of Ether surpasses Bitcoin. The bank’s research team leader likens Ether’s native blockchain Ethereum to a “financial market.” Kendrick explains that Ethereum can support a host of activities like lending, insurance, and exchanges. On the other hand, he states that Bitcoin is more of a “currency.”
Ethereum’s versatility is the major reason Kendrick believes it may replace BTC as the most prominent digital currency because people can potentially do much more with it.
Standard Chartered values BTC between $50,000 and $175,000 in the long run while it has Ether in the $26,000-$35,000 range. However, it says that BTC must first trade at $175,000 before ETH attains this level. Currently, BTC is trading just over $51,000, while Ether is at $3,755.
How Standard Chartered Derived Its Bitcoin-Ether Valuation
Standard Chartered arrived at its valuation for both digital currencies using a number of metrics. For BTC, the bank compared the major token to credit card market capitalization against potential transactions in the unbanked sector. This is because of the view Standard Chartered holds of Bitcoin as a currency. Comparatively for Ether, the banking giant considered the value of global banks vis-à-vis the value of global credit-card companies.
The future price prediction of ETH seems high in relation to its current price. Standard Chartered believes that this also carries more risks for the token. According to the bank:
“The current price reflects both the relative complexity of ETH (versus BTC) and the uncertainty around ETH’s development…In other words, while potential returns may be greater for ETH than for BTC, risks are also higher.”
The Ethereum blockchain is currently in a transitional stage towards Ethereum 2.0, a proof-of-stake model. Standard Chartered believes that the completion of the transition will further enhance the functionality and scalability of the blockchain.
Standard Chartered released these new reports amid its upcoming crypto trading venture. The latter intends to focus on institutional and corporate clients in Europe. Upon announcement of this initiative, Standard Chartered said it was working towards going live in the year’s fourth quarter.
Standard Chartered operates a network of over 1,200 branches and outlets across 70 countries. In addition, it currently has over 87,000 staff in its employ.