Standard Chartered says it’s more bullish on Ethereum than BTC. In its first crypto report, the British banking giant stated that it expects a significant increase in the value of both assets. However, believes that ETH will grow more on a relative basis and increase to 10 times its current value.
In contrast, the report claims that BTC could only handle relative growth up to 3 times its current price. Despite a more optimistic attitude towards Ethereum, the bank says the token carries a greater risk.
How banking giant Standard Chartered derived its valuation from BTC and ETH
Standard Chartered Geoffrey Kendrick, head of the analytical team, pointed out the key differences between ETH and BTC. In his analysis, he explains that the functional potential of Ethereum exceeds BTC and compares the blockchain ETH to the “financial market”. Kendrick explains that ETH can support a range of activities such as lending, insurance and stock exchanges, and BTC is more of a “currency”.
The versatility of the ETH is the main reason why Kendrick believes it can replace the BTC as the most important digital currency, because people have the potential to do so much more with it.
Standard Chartered valued BTC between $ 50,000 and $ 175,000 in the long term and ETH between $ 26,000 and $ 35,000. He adds that BTC must first trade for $ 175,000 before ETH reaches this level.
Standard Chartered has been valued for both digital currencies using a number of metrics. At BTC, the bank compared the main token with the market capitalization of credit cards against potential transactions in the non-banking sector. The reason is the opinion that BTC is more of a currency. At ETH, the banking giant took into account the value of global banks against the value of global credit card companies.
The forecast of the future price of ETH seems to be high in relation to its current price. According to the bank:
“The current price reflects both the relative complexity of ETH (compared to BTC) and the uncertainty surrounding the development of ETH. In other words, while the potential returns may be greater for ETH than for BTC, the risks are significantly higher.”
Blockchain ETH is currently in transition to ETH 2.0, a proof-of-stake model. Standard Chartered believes that completing the transition will further increase the functionality and scalability of the blockchain.
The banking giant issued this new report before launching its initiative in the cryptocurrency trade. It intends to focus on institutional and corporate clients in Europe. Standard Chartered said it is aiming to begin operations in the fourth quarter of this year.
Standard Chartered operates a network of more than 1,200 branches in 70 countries. In addition, it currently employs over 87,000 people.