Bitcoin continues to be the pinnacle of decentralization in the crypto industry. Morgan Stanley, a multinational banking and investment giant, is the latest to affirm this. Morgan Stanley stated that Bitcoin is more decentralized than Ethereum.
In an educational primer authored by Denny Galindo, an investment strategist at Morgan Stanley Wealth Management, the banking giant made several criticisms of Ethereum, the second-largest cryptocurrency by market cap.
Barons noted that Morgan Stanley noted that while the top 100 wallets held 39% of the circulating supply of Ethereum, the corresponding figure for Bitcoin was 14%.
High concentration in the hands of a few entities is not the only issue the report raised against Ethereum. It notes that the network still does not have regulatory clarity and is tackling network congestion.
Morgan Stanley also maintained that in price volatility, Bitcoin had proven more stable than Ether. In addition, the report notes that Ether had shown more correlation to equities.
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, stated the report.
Morgan Stanley’s criticisms of Ethereum have long been held as valid by the crypto community. It has been at the top of reasons for the emergence of “Ethereum killers” such as Cardano, and Solana among others.
Regardless, the case for investing in Ether (ETH) is very strong, the report notes, while not giving investment advice.
Galindo points out that the Ethereum blockchain continues to support a lion’s share of the decentralized finance (DeFi) and Non-Fungible Tokens (NFTs) market.
DeFi and NFTs give Ether use cases that will ensure its continued adoption and make it an attractive addition to some portfolios, the educative report informed.
The banking giant was also positive for the Ethereum blockchain’s planned migration to proof of stake that was likely to make Ether more scarce by making issuance deflationary.
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