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Misconception about Ethereum in the digital currency market | Expert opinion

Today, the world's second-largest cryptocurrency is at the forefront of the global investment scene with the approval of the listing of Ethereum exchange-traded funds, which was confirmed on Friday. Despite recent criticism of the currency from industry players, it appears we are on the cusp of a prosperous future for Ethereum.

Of course, the Securities Commission had no choice but to approve the ETFs

As predicted by Hao Yang, head of the platform's financial derivatives department BybitThe United States Securities and Exchange Commission (SEC) has approved the listing of Ethereum spot ETFs on exchanges. Mr. Yang also linked the regulator's decision on Ethereum ETFs to its previous decision on Ethereum futures. In addition to political pressure on the Securities Commission:

“Given that Ethereum futures will be approved in 2021, there is no logical reason why an application to list ETH ETFs should be refused. On the other hand, when it comes to BlackRock's request, regulators can acquiesce to the big men of Wall Street. rather than fighting them. (...) “Furthermore, the issue of cryptocurrency regulation has become a purely political issue, with most young voters preferring a clearer and more transparent regulatory environment, which could create more political pressure to improve crypto relations. -currencies and government."

While he succeeded Ethereum currency price After rising and surpassing the $3,800 mark before the SEC decision was announced, it lost more than 4% of its value six hours after the Ethereum ETFs were approved. But Mr. Yang believes that Ethereum will continue to grow thanks to a set of positive factors created by its network and its development team:

“The price of Ethereum will continue to increase driven by this news (investment fund: Arabic editor's note), which is a good thing for them, especially as it continues to represent the most decentralized digital innovation. most flexible and technologically innovative to date. I hope Ethereum will be valued based on this positive data, or "The fact is that blockchain is on track to generate over $4 billion in revenue this year due to demand for non-fungible tokens and decentralized financial services".

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As for some of the factors that have absorbed Ethereum's shine, Yang pointed out that its competitor's performance, SolanaThe exceptional network and expansion of its user base were among the main reasons capital was moving away from the network:

“In fact, the latter attracted huge financial flows, which drove capital away from Ethereum this year, with the number of active Solana users reaching 30 million, compared to 1 million for Ethereum (...) However, total. Ethereum's network lock value is $53.4 billion, while Solana's is only $4.4 billion. This reflects the disparate use cases, with Solana being chosen for high-speed, low-cost transactions while larger capital flows to Ethereum.

Note: The linguistic structure of the statement has been modified while preserving all its meanings

Misconceptions about comparing Ethereum and Solana

The Solana apps user interface is easy to use and affordable, making it the ideal choice for individual users. The world of digital currencies. This has led to a significant increase in its popularity, as evidenced by the daily active users (DAU) metric doubling since the start of this year, compared to only a slight increase for Ethereum over the same period. In this regard, Mr. Yang says:

“The growing interest and influx of capital has led to the rapid development of Solana, with exciting new products (...) In contrast, Ethereum has struggled to find a reason for individual users to return. This comparison is false. Personally, I admire both currencies as investment tools because they are optimized to suit different markets. “Solana has performed exceptionally well, but Ethereum has many advantages that make it a preferred choice for institutions, large transactions, and fine arts.”

The head of financial products at Bybit relies on the reliability of smart contracts on the Ethereum network. The latter controls 57% of the total capital of smart contracts, while Solana controls only 4.64%.

In addition to the above, Yang believes that the fact that the Ethereum network has not been exposed to a technical failure (outage) since its appearance in 2015 makes it more reliable than the Solana network, which appeared in 2020 and faced.. . Technical malfunctions I have encountered difficulties in transaction flow several times and some of them have stopped. Yang also highlighted that Ethereum is more stable for institutional investors:

Transaction speed may be important for traders, but relatively long settlement times will not be a problem for institutions (...) and in exchange for a few extra seconds for final settlement, these investors benefit from levels of security increased thanks to a more widely distributed, proven network. They can also settle tokenized monetary funds 24/7 throughout the year... In fact, companies like BlackRock and Fidelity have already started using the Ethereum network due to its stability, which clearly indicates that this is the right place for big capital. doing business via the Blockchain network.

👈Read more: Is the classification of digital currencies as securities negative for crypto?

Additionally, the development of digital art via blockchain networks helps create a historical character for the network. Art historians will refer to it in the future if they talk about the beginning of an apparition Non-fungible tokens. Even without this, the network makes huge profits from selling these tokens, which are priced at Ethereum.

Mr. Yang concludes his views on Ethereum, its network and its ETFs by saying:

“Ethereum is clearly a preferred destination for mega-capitalists, institutional investors and art collectors, while Solana is a preferred choice for individuals. This way, both networks can thrive together. History has taught us that it is not inevitable that one pioneer will cancel out the other. , and the two famous watch brands Rolex Casio are a good example, one is not obliged to replace the other and even if Ethereum fights against Bitcoin and Solana, it still has its place and market share, and also plays its role in anticipating a prosperous future.

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