Investment Analyst Nick Giambruno tweeted that he is not so optimistic about the long-term future of Ethereum, the world’s second most valuable cryptocurrency, and gave seven reasons why he is betting against this fast-growing digital asset.
Giambruno, chief analyst of The Casey Report and its premium advisory, Crisis Investing, specializes in big-picture geopolitics and economic trends that help investors stay ahead of the crowd and identify opportunities in overlooked markets across the world.
He previously told Legacy Research Group that Bitcoin was the only other cryptocurrency that can be termed “a truly hard asset” and that all other cryptos, starting with Ethereum, “can be controlled by insiders, development teams, and founders.”
“The folks at the head of Ethereum don’t even know what their monetary policy is going to be in a few years,” he added. “Bitcoin isn’t like that. It’s truly decentralized.”
Ethereum, or Ether, is considered the biggest challenger to Bitcoin. It has in recent weeks set new record-highs and pushed past $4,000 for the first time at around 11 p.m. Sunday ET.
Ether proponents believe it will catch up to bitcoin sometime within the next six years if it continues to perform as it has done in the past.
Here are the seven reason Giambruno disagrees, and why he thinks Ethereum will not challenge Bitcoin in the long-term:
1. It is not immutable and can be censored
2. Ethereum’s scarcity is artificial.
3. U.S. government may consider it the sale of an unregistered security
4. Ethereum network infrastructure is not decentralized
5. There is an unclear Ethereum use case
6. The economics of the token model are not appealing
7. Ethereum is an early-stage experiment and has enormous implementation risk
Bitcoin had already overcome all the challenges facing Ethereum, Giambruno said. “(Bitcoin) works in the real world and it solves probably mankind’s biggest problem which is storing and exchanging value reliably.”
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