Brian Kelly, founder and CEO of digital currency-focused investment firm BKCM LLC, believes Ethereum might be a better investment than Bitcoin — and he provided CNBC’s “Fast Money” with three reasons why.
Firstly, Kelly believes Ethereum futures may just be around the bend, now that the U.S. Securities and Exchange Commission (SEC) has officially decided that ether is and was not a security — thus removing the largest obstacle from the second-ranked cryptocurrency by market capitalization’s patch to institutional investment.
Kelly stated, regarding the SEC’s decision:
So one would think, perhaps, ethereum futures are not far off. They already have an ethereum index.
*CBOE SAYS SEC’S COMMENTS REMOVES OBSTACLE TO ETHER FUTURES
— Brian Kelly (@BKBrianKelly) June 14, 2018
Kelly fails to mention, however, that the launch of Ethereum futures might do more to hurt the price of the second-largest cryptocurrency than help it.
Since the launch of Bitcoin futures contracts, the price of the first and foremost cryptocurrency has plummeted — with many blaming the investment instruments for manipulating market prices.
Secondly, Kelly cites the augur platform as one of the primary reasons Ethereum could see accelerated growth when compared to Bitcoin.
As described by the analyst:
It’s a decentralized prediction market. What’s interesting about this [is that] this will probably be one of the biggest decentralized apps on top of ethereum. If [augur] doesn’t slow the system down, that can generally be a positive for ethereum.
Finally, Kelly sees Ethereum’s eventual upgrade from hardware mining to software mining as a driving factor for the cryptocurrency’s continued growth. He explained:
They [will] go from hardware mining, proof of work, to something called ‘proof of stake,’ which is similar to a software mining.
Ethereum creator Vitalik Buterin also recently explained that Ethereum’s scalability improvements of both layer one and layer two solutions will eventually multiply each other — eventually improving the number of users that the system would be able to handle, adding a maximum safe capacity of another 100x. He stated:
If you add 100x from Sharding and 100x from Plasma, these two together basically give you a 10,000x scalability gain.
Still, it bears mentioning that Bitcoin and Ethereum aren’t exactly in competition with one another. Upgrades to the Ethereum platform would likely serve more to hamstring competitors like EOS, while Bitcoin would remain the primary cryptocurrency for both value transfer and value storage.