The chief executive officer at Global Macro and a legendary investor, Raoul Pal has gone on record to highlight a number of reasons why Ethereum will succeed in overtaking Bitcoin in the crypto space in terms of market capitalization in the foreseeable future. This is undoubtedly a bold claim, considering the current situation of the market, as even though ETH’s market cap at $62 billion is quite impressive, it is only 18% of Bitcoin’s market cap, which is a whopping $334 billion. Pal posted on Twitter and did a comparison of the sizes of the two cryptocurrencies in light of the traditional financial markets.
The investment strategist made use of bonds and derivatives for doing a comparison, and the most prominent comments ended up being bullish for ETH. To put it simply, there is a strong possibility that at some point in the future, the whole of the advanced crypto economy could be operated on Ethereum. The economic historian said that even though Bitcoin serves as the ideal collateral layer, his hunch indicates that ETH could end up being a lot bigger where market capitalization is concerned. He believes that it could take ten years or more for this to happen.
At the moment, Bitcoin has entered into a correction phase, but it is widely regarded as a store of value over other things, such as a digital currency or a financial application layer. Sending and receiving Bitcoin is relatively slow and the asset cannot be considered money because the market is simply too volatile. However, Ethereum is not that much different from Bitcoin either. The asset is also quite volatile, even though it is a lot cheaper than BTC right now. It has had its fair share of problems because of huge network traffic, but its main selling point is the fact that it is widely used in other assets.
The Ethereum Network is used for tokenizing everything from non-fungible gaming tokens, stablecoins to real estate. Currently, Ethereum is serving as the primary lawyer of a new financial landscape, which is completely dedicated to the crypto space. Pal’s Twitter thread had started out with a bullish approach to Bitcoin and had highlighted the leading cryptocurrency’s potential as pristine digital collateral. Considering that the value of the global bond market is set at $123 trillion, Bitcoin holds a lot of potential in this arena. The thread went on to make comparisons between forex, settlements and derivatives layer of the traditional finance space and the crypto market.
There are quadrillions of USD flowing in these conventional spaces and Pal said that very few understand the financial market in regard to size in the crypto space. He said that there is no winner in this market because every blockchain comes with its weaknesses, strengths and different trade-offs. Hence, it is able to match the complexity of the financial space through the combination of different types of cryptocurrencies. Pal says that collateral and money is needed for a financial market and Ethereum can serve as the collateral.