Fidelity likes Ethereum as burn rate now exceeds issuance.
ETH continues to be the largest holding in investors’ portfolios.
Ether is currently up more than 50% versus the start of the year.
Ethereum is already up more than 50% for the year at writing but Fidelity Digital Assets still remains bullish on the premier altcoin for the long term.
Why does Fidelity like Ethereum?
The crypto platform that caters to institutional investors is constructive on Ether primarily because its burn rate now exceeds issuance.
Since the “Merge”, the net supply has declined by more than 700,000 coins, as per the firm’s recently published Q2 2023 Signals Report.
Fidelity also drives optimism from an increase in active Ethereum validators of 15% in the second quarter. The excitement around EIP-1153 update that promises lower costs and better efficiency will help unlock further upside in ETH, the firm added.
“New Address Momentum” was among other reasons cited for the positive long-term view on Ether.
Could ETH ever be bigger than BTC?
Separately, a recent CryptoVantage survey suggested about 46% of Americans expect Ether to eventually surpass Bitcoin in market capitalisation. The said study saw participation from 1,000 Americans who have had exposure to cryptocurrencies as an investment over the past five years.
Recent data from Coinshares was green as well. In a report over the weekend, the asset manager confirmed that Ethereum continues to be the largest holding in investors’ portfolios even though it has underperformed Bitcoin this year.
Note that ETH could benefit as the U.S. Federal Reserve signals a pivot as well. That’s because a lenient monetary policy tends to boost interest in the risk-on assets. Ethereum, though, has been trending down in recent sessions, though, ahead of the central bank’s announcement on Wednesday.