As Ethereum is testing a new all-time high, private notes to clients from two major banks have revealed huge differences in how the large institutions view the crypto asset. On Tuesday afternoon, ETH traded at $4,489 after reaching $4,531 earlier in the day. The price is up by 6% in just one week.
Goldman Sachs’ valuation
Bernhard Rzymelka, Goldman Sachs’ Global Markets Managing Director, estimated that continued inflationary pressures in the economy will offer support to the price of ETH. This is given that the coin has “tracked inflation markets particularly closely, likely reflecting the pro-cyclical nature as a ‘network based’ asset.” According to the note, crypto assets have traded in line with inflation breakevens since 2019.
According to the Markets Managing Director, elevated inflation rates will continue for the foreseeable which could ultimately push the price of ETH as high as $8000. This is according to an article which quoted the private note.
“The latest spike in inflation breakevens suggests upside risk,” the Goldman analyst wrote, adding that “this lines up rather well with the Ethereum chart, suggesting a late stage rally with longer term market top ahead.”
JPMorgan’s point of view
In contrast to the valuation from Goldman Sachs, Nikoloas Panigirtzoglou from JPMorgan, said that the Ethereum network is facing growing competition from other chains. These chains include Solana and Cardano. This competition has made the network less attractive than its current price would suggest.
The JPMorgan strategist issued a warning, “There is a question mark here. The current price is expressing an exponential increase in usage and traffic that might not materialize.”
Clash in the crypto community
Despite JPMorgan’s perspective, some members of the crypto community argue that ETH is becoming sound money. This follows Ethereum’s implementation of the EIP-1559 upgrade which introduced a mechanism to burn a portion of ETH paid as transaction fees.
However, other members of the community have said that those looking to invest in sound money should look elsewhere. CEO of crypto trading platform ShapeShift, Erik Voorhees explained that for an asset to be considered ‘sound money’ it needs to show predictability over long time frames. He went on to explain that “ETH can earn this quality with time, but not when mechanisms change frequently.”