Topic: Major Cryptocurrency Investors Are Betting Heavily Against Ethereum - page 2. (Read 289 times)
July 28, 2018, 12:54:10 AM
July 26, 2018, 06:22:50 AM
The biggest risk to Ethereum is all those ICOs being banned, because most of them were built on top of Ether's platform.
Looking at ethereum's chart, it's fallen less than other altcoins. So a 36% drop isn't that bad. I wonder whether Tetras Capital have gone public with their short to encourage other investors to sell...
Looking at ethereum's chart, it's fallen less than other altcoins. So a 36% drop isn't that bad. I wonder whether Tetras Capital have gone public with their short to encourage other investors to sell...
July 26, 2018, 06:18:21 AM
All things considered, having just 36% reduction of the ETH price this year is great. The only thing that keeps Ethereum from plummeting even further is the flow of seemingly countless ICOs that appear out of thin air every day. This simply cannot last forever. Moreover, if these ICOs were to switch to NEO, EOS, WAVES, or some of the other platforms that compete for the same market, nothing will prevent the Ethereum downfall. Some of these platforms offer better decentralization and much lower fees, so it won't be long before this happens. Ethereum has had the advantage of being the first to offer their decentralized application solution, but it is just a matter of time before a better practical solution takes over. On top of this, all we have seen so far is just constant postponing of their supposed PoS/Plasma/Casper improvements.
July 26, 2018, 05:36:18 AM
ECR20 tokens helped Ethereum a lot! Perhaps without this ETH wouldn't be in the top 2 on coinmarketcap. I know there is Plasma to help with the scalability issue but the problem is nobody is aware of it.
Casper and Plasma get very little views on their video because of no one care! The majority is buying cryptocurrencies without reading the white paper, so why should they start to watch videos to follow the development?
Remember when the scalability issue with Bitcoin was a hot topic? The same will apply to ETH. Now, it depends on how Plasma could be know
Casper and Plasma get very little views on their video because of no one care! The majority is buying cryptocurrencies without reading the white paper, so why should they start to watch videos to follow the development?
Remember when the scalability issue with Bitcoin was a hot topic? The same will apply to ETH. Now, it depends on how Plasma could be know
July 26, 2018, 02:21:27 AM
Quote
Some data suggests that few investors are closely monitoring Ethereum’s technological progress. Casper and Plasma are two technical updates that will help speed up Ethereum transactions. “Casper and Plasma publish their meetings, and they still have less than a few hundred views on YouTube,” Young says. “I don't think most people are either taking the time or have the technical background to really understand.”
Thanks for sharing this. This part in particular is a little bit worrying to me. We know a lot of people have jumped into crypto doing little or no research, and that contributed to all that volatility in such a short time.
I myself am into Ethereum but am starting to have a few doubts after seeing this. A speculative price cannot hold up against an actual price if there is nothing fundamental backing the asset, and that might be the case for ETH if this scaling problem is in fact an issue. However, this is just one side of it like you said and more research is needed.
July 26, 2018, 02:04:15 AM
Quote
Ethereum, the second-largest cryptocurrency platform in the world, has seen its currency plummet 36% this year. But some major crypto investors think it has more room to fall, and they're betting aggressively against it.
New York-based Tetras Capital, a crypto hedge fund that launched last summer and is known for in-depth analyses of cryptocurrency prices, has shorted ether, borrowing the coins and hoping they tank so it can buy them back at a lower price. Tetras started shorting ether in May 2018, when the price ranged from $572 to $659. Ether currently hovers around $470.
Last week, Tetras published a 41-page report explaining its reasoning. Forbes estimates the six-person hedge fund has $30 million in assets under management. The ether short is one of its two high-conviction positions—the other is its bitcoin investment, says founding partner Alex Sunnarborg.
Timothy Young, a former entrepreneur who sold tech startup Socialcast for more than $100 million in 2011, is shorting ether through his San Francisco family office, Hidden Hand Capital. Hidden Hand has more than $100 million in crypto assets under management. And Bay Area hedge fund Neural Capital also has a short position, according to a person familiar with the matter.
Ethereum aims to be a global computing platform, but investors like Tetras and Hidden Hand are concerned that its $48 billion market cap isn’t justified, largely because the network can only handle about 15 transactions per second. By contrast, Visa can handle 24,000 transactions per second. “Ethereum has an incredible talent pool of developers,” Young says. “In the long term, I think they’ll solve a lot of scaling challenges. But in the short term, there’s a disconnect between the price and underlying technology.” Sunnarborg agrees, saying, “Just because something is a good idea doesn’t mean it’s a good investment.”
Ethereum isn’t controlled by a single company, and decentralized applications (DApps) run on top of it. None of these apps have more than 5,000 daily active users, yet the network is nearly at full capacity. Network congestion can cause the fees required to use the platform to skyrocket.
For example, to perform a simple step in the Ethereum-based game CryptoKitties, where users can create digital memorabilia, it might cost $3. Those costs rose higher than $20 at the end of 2017. “An application call can be roughly 1 million times as expensive on Ethereum as compared to a centralized service like AWS [Amazon Web Services],” Tetras wrote in its report.
Ethereum developers are working on several solutions to improve network capacity. The Tetras team thinks significant improvements are too far off. “The most optimistic estimates suggest that Ethereum’s Layer-2 and other broad scaling solutions will not be fully functional, tested, or capable of supporting the most popular DApps for roughly another two years,” Tetras’ report reads.
Jake Brukhman, founder of Brooklyn-based crypto asset manager CoinFund, disagrees. He has been holding ether since July 2015, and the asset has historically made up between 20% and 42% of his firm’s first fund. Among Ethereum's nearer-term scaling solutions like “state channels,” which allow transactions to happen more quickly, off the Ethereum blockchain, “a ton of improvements are coming to market this year,” Brukhman says. “As a blockchain technology, Ethereum still remains the largest ecosystem of technologies, tools and developers.”
Some data suggests that few investors are closely monitoring Ethereum’s technological progress. Casper and Plasma are two technical updates that will help speed up Ethereum transactions. “Casper and Plasma publish their meetings, and they still have less than a few hundred views on YouTube,” Young says. “I don't think most people are either taking the time or have the technical background to really understand.”
Other big-name investors are on the fence about ether. Kyle Samani, managing partner at Multicoin Capital, says he’s “seriously considering” shorting it, but is already betting against ripple and litecoin and isn’t ready to add more short exposure. Longtime crypto investor and CoinShares chief strategy officer Meltem Demirors is “neutral” on ether. “We are nowhere near a bear market yet,” she says, although she thinks demand for Ethereum-based tokens and applications is largely speculative. “In the absence of more Enterprise Ethereum Alliance announcements in 2018, I won’t look to add more exposure.”
Tetras goes into many other reasons for its short in its report. Other well-funded Ethereum competitors like EOS, Dfinity and Tezos have recently come online or are planning to launch later this year. “EOS just raised $4 billion, and you can pay teams to build applications,” Sunnarborg says. “I don't think people with big bags [investments] are going to let that die.”
Tetras also thinks the ICO boom has driven ether’s price up, since many ICOs accepted only ether from interested investors. Those ICOs are at risk of a regulatory crackdown, “which will dry up most of ETH demand,” the report predicts.
Sunnarborg believes ether would need to become a better store-of-value asset to live up to its valuation. He sees bitcoin as the more likely winner as the top store-of-value crypto asset, due to “crucial characteristics, including: security, political and architectural centralization, monetary supply, regulation, and liquidity,” he says.
What would it take for Tetras to change its mind and exit its short? “If Vitalik and Vlad came out tomorrow and said, ‘In our sleep we developed the perfect sharding [scaling] solution,’ we might change our view,” Sunnarborg says.
Or if a regulatory ruling gave Ethereum a competitive advantage—for example, if other platforms like NEO or Dfinity were classified as securities—he would rethink the position. He doesn’t see the SEC’s recent statement that Ethereum isn’t a security as an indicator of a competitive advantage, because the ICOs that launched on top of Ethereum are still at risk of being deemed securities.
https://www.forbes.com/sites/jeffkauflin/2018/07/25/why-major-cryptocurrency-investors-are-betting-heavily-against-ethereum/
New York-based Tetras Capital, a crypto hedge fund that launched last summer and is known for in-depth analyses of cryptocurrency prices, has shorted ether, borrowing the coins and hoping they tank so it can buy them back at a lower price. Tetras started shorting ether in May 2018, when the price ranged from $572 to $659. Ether currently hovers around $470.
Last week, Tetras published a 41-page report explaining its reasoning. Forbes estimates the six-person hedge fund has $30 million in assets under management. The ether short is one of its two high-conviction positions—the other is its bitcoin investment, says founding partner Alex Sunnarborg.
Timothy Young, a former entrepreneur who sold tech startup Socialcast for more than $100 million in 2011, is shorting ether through his San Francisco family office, Hidden Hand Capital. Hidden Hand has more than $100 million in crypto assets under management. And Bay Area hedge fund Neural Capital also has a short position, according to a person familiar with the matter.
Ethereum aims to be a global computing platform, but investors like Tetras and Hidden Hand are concerned that its $48 billion market cap isn’t justified, largely because the network can only handle about 15 transactions per second. By contrast, Visa can handle 24,000 transactions per second. “Ethereum has an incredible talent pool of developers,” Young says. “In the long term, I think they’ll solve a lot of scaling challenges. But in the short term, there’s a disconnect between the price and underlying technology.” Sunnarborg agrees, saying, “Just because something is a good idea doesn’t mean it’s a good investment.”
Ethereum isn’t controlled by a single company, and decentralized applications (DApps) run on top of it. None of these apps have more than 5,000 daily active users, yet the network is nearly at full capacity. Network congestion can cause the fees required to use the platform to skyrocket.
For example, to perform a simple step in the Ethereum-based game CryptoKitties, where users can create digital memorabilia, it might cost $3. Those costs rose higher than $20 at the end of 2017. “An application call can be roughly 1 million times as expensive on Ethereum as compared to a centralized service like AWS [Amazon Web Services],” Tetras wrote in its report.
Ethereum developers are working on several solutions to improve network capacity. The Tetras team thinks significant improvements are too far off. “The most optimistic estimates suggest that Ethereum’s Layer-2 and other broad scaling solutions will not be fully functional, tested, or capable of supporting the most popular DApps for roughly another two years,” Tetras’ report reads.
Jake Brukhman, founder of Brooklyn-based crypto asset manager CoinFund, disagrees. He has been holding ether since July 2015, and the asset has historically made up between 20% and 42% of his firm’s first fund. Among Ethereum's nearer-term scaling solutions like “state channels,” which allow transactions to happen more quickly, off the Ethereum blockchain, “a ton of improvements are coming to market this year,” Brukhman says. “As a blockchain technology, Ethereum still remains the largest ecosystem of technologies, tools and developers.”
Some data suggests that few investors are closely monitoring Ethereum’s technological progress. Casper and Plasma are two technical updates that will help speed up Ethereum transactions. “Casper and Plasma publish their meetings, and they still have less than a few hundred views on YouTube,” Young says. “I don't think most people are either taking the time or have the technical background to really understand.”
Other big-name investors are on the fence about ether. Kyle Samani, managing partner at Multicoin Capital, says he’s “seriously considering” shorting it, but is already betting against ripple and litecoin and isn’t ready to add more short exposure. Longtime crypto investor and CoinShares chief strategy officer Meltem Demirors is “neutral” on ether. “We are nowhere near a bear market yet,” she says, although she thinks demand for Ethereum-based tokens and applications is largely speculative. “In the absence of more Enterprise Ethereum Alliance announcements in 2018, I won’t look to add more exposure.”
Tetras goes into many other reasons for its short in its report. Other well-funded Ethereum competitors like EOS, Dfinity and Tezos have recently come online or are planning to launch later this year. “EOS just raised $4 billion, and you can pay teams to build applications,” Sunnarborg says. “I don't think people with big bags [investments] are going to let that die.”
Tetras also thinks the ICO boom has driven ether’s price up, since many ICOs accepted only ether from interested investors. Those ICOs are at risk of a regulatory crackdown, “which will dry up most of ETH demand,” the report predicts.
Sunnarborg believes ether would need to become a better store-of-value asset to live up to its valuation. He sees bitcoin as the more likely winner as the top store-of-value crypto asset, due to “crucial characteristics, including: security, political and architectural centralization, monetary supply, regulation, and liquidity,” he says.
What would it take for Tetras to change its mind and exit its short? “If Vitalik and Vlad came out tomorrow and said, ‘In our sleep we developed the perfect sharding [scaling] solution,’ we might change our view,” Sunnarborg says.
Or if a regulatory ruling gave Ethereum a competitive advantage—for example, if other platforms like NEO or Dfinity were classified as securities—he would rethink the position. He doesn’t see the SEC’s recent statement that Ethereum isn’t a security as an indicator of a competitive advantage, because the ICOs that launched on top of Ethereum are still at risk of being deemed securities.
https://www.forbes.com/sites/jeffkauflin/2018/07/25/why-major-cryptocurrency-investors-are-betting-heavily-against-ethereum/
....
Some interesting analysis and breakdowns on ethereum's platform. The majority of ethereum content posted on this forum is pro eth. There isn't much said on eth from the opposite perspective and so I hope people will not mind me sharing this. I tried to bold most of the relevent points but tbh the whole thing could be worth reading for anyone interested in these topics.
It looks as if the majority of investors are shorting ethereum under the expectation that it is overvalued and overpriced. They could majority wise expect the price to decrease. Over the short term that could be the trend we'll see, especially if a majority of larger institutional investors have formed a consensus on this.
Note how the quoted portions attempt to support their stance with facts and analysis. I think this attempt @ a rational overview is what was missing from the "bitcoin is a bubble" and "bitcoin is a tool for criminal and money launderers" hysteria which pervaded the media awhile ago. Could be something to consider in the days to come when media stories are aired without much if any attempt at verification.
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