JPMorgan, one of the leading banks on Wall Street has issued a notice to investors notifying them that Ethereum will perform better than Bitcoin in terms of liquidity and turnover. These remarks come just after Ether reached a record high of $2750 on April 29. On other hand, Bitcoin has struggled for the past week to maintain $55,000, which is still lower than its all-time high of $65,000.
The bank even pointed out to the difference between Ethereum and Bitcoin in terms of usage. It noted that Bitcoin was mainly used as a store of value while Ethereum was more of a framework, which was heavily depended upon by the crypto community.
JP Morgan’s three reasons
The note to investors started by highlighting liquidity shock as the first reason. Whilst the two most dominant cryptocurrencies has undergone a liquidity shock at the beginning of April, Ethereum had recovered quickly. The liquidity shock had caused liquidation in the respective derivatives market causing a price dip.
The second reason the bank gave was that Ether was less reliant on the derivatives market. The bank supported this argument noting that in a market with a high spot turnover, it is commendable that long exposure to Ether was less reliant on leveraging using futures and swaps compared to Bitcoin.
Thirdly, the ban pointed out to the increased number of activities on the Ethereum compared to Bitcoin blockchain. This was attributed to the increased number of DeFi protocols. Because of this activity, ETH is viewed as highly liquid compared to Bitcoin with an 11% vs. 4% comparison.
Because of these reasons, Ethereum was less volatile compared to Ethereum given that it does not suffer from over-leveraged positions compared to Bitcoin. This is why the crypto is outperforming Bitcoin and the trend will continue to the future.
Ether’s price movement
Ether has been doing very well after it surpassed the $2700 mark on Tuesday. As of writing, the crypto is trading at $2730 after having recorded a 4% growth over the past 24 hours. On a weekly analysis, the crypto has gained around 14% since the last price dump last week.
On the other hand, Bitcoin is still struggling to reach the $60000 mark it had set at the beginning of the month. The currency is currently trading at around $53000, after failing to maintain its previous day’s $55,000.