Billionaire investor and hedge fund manager Mike Novogratz feels that Ethereum, in many ways, is outperforming bitcoin.
Mike Novogratz Thinks ETH Is Da Bomb
While bitcoin is the world’s number one digital currency by market cap and is trading for more than $50,000 per unit, Ethereum is in a whole new category thanks to the technology it presents. Ethereum is the second largest crypto by market cap and is only trading for about $3,600 at press time. At first glance, it doesn’t even remotely compare to bitcoin, but it’s the technology that supports it that makes it so different and intriguing.
What Ethereum does that bitcoin doesn’t is that it’s compatible with smart contracts. This makes it a top pick for developers looking to create new coins and decentralized apps (dapps). It may not be a top coin to trade, but the network underneath the currency is opening many doors for tech experts, and thus the crypto space is largely growing thanks to the charisma of Ethereum and those working it.
Novogratz also says that bitcoin is becoming less and less attractive as an inflation hedge. He points out that bitcoin remains heavily volatile, with the currency recently dropping as much as 17 percent over the course of just a few days. The fact is that bitcoin has gone down alongside the dollar, and he thinks Ethereum is the currency many investors will turn to as a means of fighting additional financial strain.
People see Ethereum as a technology bet.
Bitcoin first began garnering its hedge tool reputation nearly two years ago when the coronavirus pandemic began striking global economies. Several governments began issuing stimulus measures as a means of assisting people throughout that time of crisis, as layoffs and financial trouble was running amok. This ultimately began contributing to inflation, and fiat currencies like the U.S. dollar began to fall as more of it was printed.
However, bitcoin began spiking during this time, which gave everyone the idea that the currency was somehow stronger than anyone could have imagined. People began buying the currency left and right, and investors flocked to exchanges as they worked to buy up whatever crypto assets they could.
On top of that, bitcoin is presently limited to 21 million units, meaning it is a finite currency and set to run out in the future. However, Novogratz believes that as the Fed stops putting money back into the economy, bitcoin will lose some of its stamina, which may provide an outlet for Ethereum to rush in and take over.
The Fed’s Decisions Will Influence BTC
Crypto’s not trading as bullish as equities because you see this tension that the Fed’s going to take the booze away from the punchbowl much sooner than we thought. Broadly, that shouldn’t be good for risk assets.