In a detailed tweet that caught the attention of the crypto community, Bitwise chief information officer (CIO) Matt Hougan put forth five comprehensive reasons explaining why he believes Ethereum (ETH) stands out as a more compelling investment opportunity than even Bitcoin. Notably, Bitwise is among the firms that launched their Ether futures ETFs yesterday, as well as among the contenders for a Bitcoin spot ETF.
Why Ethereum Could Outperform BTC Beginning with his primary reason, Hougan emphasized the network’s role as a revolutionary global computing platform. He tweeted, “Ethereum is targeting the largest investment opportunity in crypto; bigger, even, than Bitcoin (and I love Bitcoin). Ethereum is a new global computing platform that could rewire how the entire financial industry and much of the creative world works.” This transformative potential positions Ethereum to drastically reshape multiple sectors, further anchoring its position in the crypto landscape.
Hougan’s second point revolved around the economic workings of the ETH network. He pointed out the distinctive manner in which Ether’s value rises with its usage. “Ethereum’s value is driven by cash flows,” he remarked, highlighting that the increased activity on the network directly translates to revenue. This, in turn, cascades benefits to ETH holders, mirroring traditional financial instruments’ rewards like buybacks and dividends.
Venturing further into the networks’ attributes, Hougan spotlighted the platform’s robust ecosystem populated with a myriad of applications and developers. He stated, “Ethereum has the most applications and developers in crypto. If you’re looking for where the next breakthrough crypto application will appear, look in the ecosystem.”
On top of this, he illustrated Ethereum’s accelerating integration into the business operations of major corporations. Hougan cited Nike’s impressive $200 million revenue from digital goods on Ethereum, PayPal’s innovative payment solution on the platform, and the swift settlement of Goldman Sachs’ $100 million bond on Ethereum as testaments to its growing institutional traction.
Lastly, he identified the blockchain’s potential as a dominant platform for tokenized real-world assets. “Ethereum is likely to be the home of real-world assets in the crypto ecosystem. If you are excited about tokenization, you should be excited about Ethereum,” he claimed.
The ETH community, represented by figures like Ryan Berckmans, echoed their agreement and lauded Hougan’s elucidations. Berckmans responded saying, “Great thread, Matt. Can you open your DMs so inveterate ETH people can reach out?”
While there were no notable responses from the Bitcoin community, several members of the XRP community pointed out that Hougan should research the “ETH Gate” allegations which claims that ETH has received regulatory clarity ahead of all other crypto assets in the US through backdoor deals. Digital Asset Investor.XRP wrote: “One big problem Matt…. #ETHGATE.”
EIP-4844 Will Be A Game-Changer Hougan’s bullish sentiments on ETH aren’t newly formed. In a conversation with Anthony Pompliano in April, he had elucidated on the upcoming Ethereum Improvement Proposal 4844 (EIP-4844, “Proto-Danksharding”) and its prospective transformative impact on transaction costs.
“I’m really excited about what’s going on in the ecosystem and particularly EIP-4844 and how it will quash costs on layer-2 solutions. I think people don’t understand how important that is. They don’t understand the value of a price that’s effectively zero. […] I think it’s a game changer. So I’m really excited about that,” he remarked.
The update was recently delayed to early next year, as Bitcoinist reported. The reason for this is the lack of public testnets so far and the upcoming Devconnect conference in November 2023.
At press time, ETH traded at $1,665.
ETH price below 38.2% Fib, 1-day chart | Source: ETHUSD on TradingView.com Featured image from Pensions & Investments, chart from TradingView.com