Ether (ETH), the second-largest cryptocurrency by market cap, could see further gains towards $10,000 this year after reaching a new all-time high around $2,780 on Thursday – a roughly threefold increase forecasted by FundStrat, a market research firm.
ETH is up about 40% for the month to date versus a 5% decline for bitcoin (BTC). “We’re maintaining our overweight ethereum vs. bitcoin recommendation from April 2020,” wrote FundStrat in a research note published on Thursday.
- “Ethereum’s market cap has risen to ~30% of bitcoin’s over recent weeks. During the last market cycle, ethereum broke this level and [had] as high as 80% of bitcoin’s value.”
- “The crypto narrative is shifting from bitcoin to ethereum and other segments like DeFi (decentralized finance) and Web 3.0 apps.”
- FundStrat is bullish on ETH as new financial applications are being developed on the Ethereum network, which has grown significantly in scale over the last year.
- “These applications are generating ~3x fees for the Ethereum network vs. Bitcoin, which trades at ~3x the market cap.”
- “In crypto accounting terms, this is the same as a company using revenue, less operating costs and earning profit that is used to buy back stock. This means the network would become profitable like a company once ETH supply reduction from burned fees outpaces inflation,” wrote FundStrat.
- FundStrat also expects bitcoin to reach $100,000 this year and the total cryptocurrency market cap to reach $5 trillion.
