With a loss of 3.7% in the last week and 2.7% in the last hour, Bitcoin’s price is close to the critical support. On the other hand, Ethereum managed to hit a new all-time high and lies on two fast-growing sectors: DeFi and NFTs.
Former Goldman Sachs CEO Raoul Pal has released data showing that Ethereum has outperformed Bitcoin by 250% in the ETH / BTC trading pair over the course of its history. According to Pal, the cryptocurrency “fell” against BTC just 5 months after its launch on August 6, 2015. He added:
Let that cherish the idea that all other tokens are tending towards zero in BTC terms.
The network effect of Ethereum has an impact on the price
According to Pal, the only tokens that are trending down compared to Bitcoin are those that cannot achieve a “network effect”. The former CEO of Goldman Sachs claimed:
Tokens that are not trending network effects, tokens that achieve ecosystem network effects (active wallets + developers + apps) are likely to rise over time in BTC terms.
He therefore recommended that investors keep a “basket” of cryptocurrencies. For Pal, however, there is “no science and no value” when choosing a cryptocurrency to add to the portfolio. He revealed that his basket was made up of 10 cryptocurrencies, but didn’t mention any by name.
Previously, Pal had positively rated Bitcoin as a store of value, as the IMF (and the US) had talked about a new Bretton Woods system. The Breston Wood payment system, introduced after World War II, set the rules for international trade and financial relationships for decades.
Current Treasury Secretary Janet Yellen has expressed a desire to work with her allies to dictate what Pal believes is a “global financial initiative” and to keep the USD strong. In return, many currencies could be subject to devaluation.
The former CEO of Goldman Sachs predicts a “big change for us” and believes that investments in technology and Bitcoin will function as a “life raft”. Pal added:
Devaluation is the enemy, and overhauling the world economy is the price. It’s a fine line. With Bitcoin we can hedge the risk. Global growth could be an unexpected price, as the economy is stimulated for the future by impulses to modernize, digitize and retool. It is possible, but far from certain. However, I think betting on investing in BTC + technology (including digital assets) is the best way to be successful.
At the time of writing, BTC is trading at $ 56.187. On the other hand, ETH is trading at USD 1992.73. In the past year, this cryptocurrency recorded gains of over 1.073%.