KEY POINTS

  • Morgan Stanley introduces primer on Ethereum 
  • The aim of the report is to educate investors
  • The report argues ETH has a much bigger market than BTC

Morgan Stanley Wealth Management released a 20-page primer on Ethereum that detailed how the top coin is a better bet than Bitcoin.

Barron's quoted the report as noting that Ether has enough that can distinguish it from other cryptos and make it worth considering as a separate investment and apart from Bitcoin, which is the most popular cryptocurrency.

The aim of the report, by investment strategist Denny Galindo, is to educate investors on Ether. It has clearly stated that it is not a buying or selling recommendation on Ether.

The report lays out the basics about Ethereum. But its central focus is how Ether, and not Bitcoin, is becoming attached to a lot more than just payments and store of value, the two functions of Bitcoin.

Ethereum acts as an app store owned by no one, and it makes possible things such as decentralized finance applications and non-fungible tokens (NFTs). Galindo argues that Ether has a much bigger potential market than Bitcoin.

Ether, the native token of decentralized, open-source blockchain with smart contract functionality Ethereum, is second only to Bitcoin in market capitalization. As of 12.07 a.m. ET Thursday, ETH was trading 2.57% at $3171, CoinMarketCap data showed.

On the negative side, Ether, like all other cryptos, will have to navigate regulatory issues. In addition, Ether is not a hedge to equities, the author noted.

“While Ethereum and Bitcoin have had a 0.70 correlation to one another since December 2018, Ethereum has been nearly twice as correlated to the S&P 500, at 0.26, versus 0.14 for Bitcoin,” Barron's cited the report as saying.

“If these correlations hold, replacing some Bitcoin exposure with Ether might actually make a portfolio more correlated to equities.”

Ethereum, Bitcoin
In this photo illustration, visual representations of the digital Cryptocurrency, Bitcoin and Ethereum are pictured atop a Japanese 10,000 yen note on March 20, 2020 in Katwijk, Netherlands. Yuriko Nakao/Getty Images
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