Ether (ETH) may have found its unique selling point after all, according to a crypto analyst. Michael Nadeau, a crypto analyst at The DeFi Report, believes that Ethereum is a tech play on the growth of Web3, serving as a high-growth index for Web3 adoption. In contrast, Bitcoin is often referred to as “digital gold.” Nadeau’s perspective comes at a time when there have been doubts about how to define Ether to promote the idea of spot Ether exchange-traded funds (ETFs).
Looking ahead, the Web3 industry is expected to generate annual revenue of $33.5 billion by 2030, according to Grand View Research. Nadeau argues that Ethereum has a much larger addressable market when compared to the two largest cryptocurrencies, and it can be better understood using simple investment terminology.
Nadeau also believes that Ether has the potential to break its November 2021 all-time high of $4,870 once spot Ether ETFs are launched. He draws a parallel to Bitcoin, which experienced increased demand after the launch of spot Bitcoin ETFs in January.
One key difference between Ethereum and Bitcoin, according to Nadeau, is that Ethereum validators do not face high operating expenses like Bitcoin miners. This means that Ethereum validators are not compelled to sell their holdings to cover costs, thereby increasing the demand for Ether.
Nadeau further highlights that Ether is more “reflexive” to positive feedback loops compared to Bitcoin. He suggests that this reflexivity is expressed through price action leading to on-chain activity, resulting in more Ether being burned and driving further narratives, price action, on-chain activity, and Ether burn.
In addition, Nadeau argues that Ethereum has superior network effects compared to Bitcoin and provides investors with the opportunity to stake Ether and earn a yield, a feature that Bitcoin lacks.
These views come in response to criticism from various crypto analysts who claim that Ethereum lacks a clear selling point, unlike Bitcoin’s established narrative of being “digital gold.” However, Nadeau’s analysis suggests that Ethereum’s potential as a tech play on Web3 growth and its unique features make it an attractive investment option.
It is worth noting that the opinions expressed in this article are not investment advice or recommendations. Investors should conduct their own research and analysis before making any investment decisions.