Cryptocurrency tycoon Mike Novogratz: Bitcoin can only resist inflation, Ethereum is more attractive

Ethereum (ETH) has outperformed Bitcoin (BTC) this year and appears to be rebounding more strongly than Bitcoin after a sharp sell-off in recent months. Michael (Mike) Novogratz, a former Goldman Sachs hedge fund manager and founder and CEO of cryptocurrency bank Galaxy Digital, thinks he knows why.

Michael Novogratz recently joined the ranks of those who are optimistic about the prospects of Ethereum in a media interview. He pointed out that Ethereum is currently a more attractive investment option than Bitcoin. Because Bitcoin is mainly used as a tool to hedge against inflation risks and has limited other uses, but investing in Ethereum can be a bet on new technologies.

Ethereum, the blockchain behind Ether, can deploy smart contracts and build decentralized applications (Dapps). Ethereum is a programmable blockchain network that can be applied to multiple fields, including decentralized finance (DeFi) and non-fungible tokens (NFTs). Michael Novogratz said: This is why you see Ethereum outperforming Bitcoin. People see Ethereum as a bet on technology and Bitcoin as a bet on the devaluation of fiat currency.

The rumor that Ethereum will replace Bitcoin and dominate the field of crypto assets has been circulating in the cryptocurrency circle for some time, but it was not until this year that Ethereum really showed signs of challenging Bitcoin. Although Bitcoin is currently the largest cryptocurrency, its price has only risen by about 70% (in US dollars) this year, far less than Ethereum's nearly 500% increase in the same period.

Michael Novogratz said a few months ago that Bitcoin could be seen as a digital version of gold in the next 3,000 years, while Ethereum has a very different purpose and will be at the top of the cryptocurrency list.

The billionaire investor, who is known for his support of the cryptocurrency industry, also expressed his views on the recent plunge in the cryptocurrency market. He predicted that Bitcoin prices are unlikely to fall below $40,000 because institutional investors and some countries have already understood the development potential of this asset.

People have realized that cryptocurrencies are an asset class and that Bitcoin has a place in cryptocurrency portfolios.

In July this year, analysts from Wall Street investment bank Goldman Sachs also said that Ethereum is the blockchain project with the highest practical potential. Ethereum is currently the most popular smart contract application platform. Although Bitcoin has the advantage of being a pioneer, this cannot prevent Bitcoin from lagging behind other cryptocurrencies.

Mark Cuban, owner of the Dallas Mavericks of the NBA, is another investor who has praised Ethereum. He recommends that newcomers to the cryptocurrency industry choose Ethereum as an investment target because the world's second largest cryptocurrency has the greatest growth potential.