Many analysts consider Bitcoin a store of value, but at the same time it is very volatile with limited uses compared to Ethereum.

The Ethereum currency is witnessing an increasing demand and adoption by investment institutions, especially after the recent update and the movement of Ethereum towards a model and allocation mechanism instead of mining.

Famous macro analyst Natasha Chi explains how Ethereum has emerged as a risk-free asset class.

It suggests that Ethereum has the potential to become the new government bond.

Natasha notes that the Ethereum Proof of Stake (PoS) blockchain will be the dominant blockchain as pegged ETH will replace US Treasuries as a risk-free asset class.

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At the moment, buying US Treasuries is like taking an indirect share of US GDP.

Thus, the risk of investing here is much lower than any other asset in the market.

All other asset classes such as bonds, stocks and property determine their price basis based on the US Treasury yield.

The rise of the crypto and ethereum market changes expectations:

The above analyst notes that Ethereum is one such public blockchain that is capable enough to power the real economy.

Analyst Natasha further explains that the Ethereum blockchain collects gas fees for any transactions that occur, whether ETH or ERC20 traffic on the network.

Thus, as network activity rises, fees rise accordingly.

This is similar to collecting VAT for all economic activities that occur on the Ethereum network.

Currently, the rise of decentralized finance and NFT is fueling new economic activity on the Ethereum blockchain.

The interesting thing about Ethereum is that it can collect taxes from people all over the world.

Thus, due to the integration of Ethereum with the real economy, fee income will begin to track the amount of real economic activities that are happening around the world.

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As a result, Ethereum gas will start contributing to global GDP growth.

explain Analyst Natasha Chi said:

Remember why US Treasuries are considered a risk-free asset?

Because they are backed by tax revenue from the world’s largest economy.

But since gas fees are tax revenue from the entire global economy, Ethereum can single-handedly beat US Treasuries in the risk-free asset game.

She also noted that as the Ethereum blockchain reaches and moves to the Proof of Stake (PoS) model, it will create a new revenue stream for Ethereum holders.

And unlike the Bitcoin Proof of Work model that requires huge investment, anyone can participate in Ethereum.

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Natasha notes that this would be simpler than buying Treasuries.

Although this will take years for Ethereum to accomplish, if Ethereum maintains its position as a dominant smart contract network, and grows to power more and more real activities on a global scale, over time the yield should track global growth + global inflation.

However, one caveat to this entire assumption is that Ethereum supply growth must be higher than inflation at any given point in time.

Currently, the supply of Ethereum is growing at 4.5% annually.

The rate of paper currency inflation is 2-3% per year.

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