Ethereum is performing better than equities.
A new Bloomberg intelligence report has claimed that the second-largest crypto (Ethereum) is a 21st-century finance building block. The Bloomberg intelligence report was shared on Twitter by Bloomberg intelligence’s senior commodity strategist, Mike McGlone.
The report added that Ethereum’s demand and adoption are constantly increasing while its supply keeps declining. However, Ethereum’s standing as the basis for disrupting the traditional finance industry would also contribute to its price rise.
McGlone lends credence to his claim by tweeting a chart of Bloomberg intelligence’s analysis which showed that the second-largest crypto has been performing better than equities, including the S&P 500 index, over the past five years. “… Ethereum’s position at the epicenter of the digitization of finance and money may be a foundation for further price appreciation.”
#Ethereum – 21st Century Finance Building Block: BI Crypto
Demand and adoption are increasing, supply is declining and Ethereum’s position at the epicenter of the digitization of finance and money may be a foundation for further price appreciation. pic.twitter.com/mDNupG8NBf— Mike McGlone (@mikemcglone11) April 26, 2022
The Bloomberg report suggests that ETH will continue to outperform Equities. With time, the ETH price will increase because the supply is consistently falling because of ETH EIP 1559 upgrade, a fixed-per-block network fee that is burned reducing supply daily. The decreasing supply and increasing demand will help Ethereum to grow.
Ethereum is currently issuing new Ether at a rate of 4% per year, although this is expected to decrease to around 0.5-1% as a part of the Ethereum 2.0 upgrade. Once this occurs, many speculate that the burn rate of Ether will be greater than the token’s issuance, causing ETH to become a deflationary currency. So far 2,166,871 (2.1M) ETH worth $6,219,070,938 ($6.2B) have been burned.
Ethereum supply decline and Ethereum revenue rise
Based on McGlone’s analysis above, it is also likely revenue on the Ethereum network is bound to keep rising. The rapid growth of the DeFi and NFT sectors caused a massive rise in Ethereum gas fees last year, with the network earning nearly $9.9B in gas fees alone. This amount was 17x more than the previous 12 months’ earnings through gas fees.
Since Ethereum was the first network that enabled the development of NFT and DeFi projects, it remains the network with the largest amount of those projects. Consequently, the $124B total volume locked (TVL) in the network makes it the network with the highest TVL among other networks.
Industry analysts predict that Ethereum’s gas fees earnings this year will likely be about $12.5B. If this estimate becomes a reality, the network’s gas fees earnings for this year would be 35% higher than last year.
Recently Mike McGlone, a senior commodities analyst at Bloomberg, called Ethereum (ETH) the collateral of the internet following the cryptocurrency’s widespread adoption across various blockchain protocols like non-fungible tokens (NFTs) and the metaverse.
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Source: https://thecryptobasic.com/2022/04/27/ethereum-is-a-21st-century-finance-building-block-bloomberg-intelligence-crypto/?utm_source=rss&utm_medium=rss&utm_campaign=ethereum-is-a-21st-century-finance-building-block-bloomberg-intelligence-crypto