Wall Street banking giant Morgan Stanley (NYSE:MS) believes the market for Ethereum (CRYPTO: ETH) could be even bigger than Bitcoin (CRYPTO: BTC).
What Happened: In a 20-page report seen by Barron's, Morgan Stanley wealth management outlined how Ethereum is worth considering as a sound stand-alone investment apart from Bitcoin.
The report states Ethereum shares two essential characteristics with Bitcoin: it is a decentralized currency and the element of digital scarcity. However, Ethereum’s utility could be more than being a means of payment or store of value because it is becoming attached to a “larger collection of activities.”
Referencing the fact the majority of decentralized applications (Dapps) are built on the Ethereum blockchain and the rapidly growing non-fungible tokens (NFTs) space, Morgan Stanley investment strategist Denny Galindo argues that Ethereum “has a potentially bigger market” than Bitcoin.
According to data from DeFi Llama, Ethereum currently accounts for 59.35% of DeFi activity with more than $123 billion locked in Ethereum-based protocols.
Data also shows that 97% of NFT volume — around $19.5 billion — is on the Ethereum blockchain.
Galindo also pointed out Ethereum is quite the hedge to equities that some people think it is.
“While Ethereum and Bitcoin have had a 0.70 correlation to one another since December 2018, Ethereum has been nearly twice as correlated to the S&P 500, at 0.26, versus 0.14 for Bitcoin,” stated the report.
“If these correlations hold, replacing some Bitcoin exposure with Ether might actually make a portfolio more correlated to equities.”
Price Action: As of Friday morning, Bitcoin was trading at $43,742.50, down 0.35% in the last 24 hours. Ethereum was trading at $3,102.44, down 1.93% over the same period.
