Ethereum could overtake Bitcoin as the dominant cryptocurrency, Goldman Sachs said in a July 6 note obtained by Business Insider.

The bank said in the note that Ether "currently looks like the cryptocurrency with the highest real use potential as Ethereum, the platform on which it is the native digital currency, is the most popular development platform for smart contract applications.”

The endorsement comes after Goldman Sachs published a report in May discussing crypto’s potential as an asset class.

U.S. banks have increasingly begun to accept Bitcoin as it gains traction with more mainstream investors but have been slower to adopt Ether. Morgan Stanley was one of the first banks to offer Bitcoin funds, and Goldman Sachs said in March it was developing cryptocurrency investments as well.

But, even if Goldman thinks Ether could overtake Bitcoin eventually, neither cryptocurrency will soon replace gold as the most common store of value because of volatility, Goldman said in the note.

Some commodities like gold are hedges against bad inflation, the Goldman note explained, while cryptocurrencies for the bank are seen as more of a “risk-on inflation hedge.” With this type of hedge, comes risks, the bank said.

"This competition among cryptocurrencies is another risk factor that prevents them from becoming safehaven assets at this stage," Goldman said in the note