Despite supporting thousands of cryptocurrencies on its open-source platform, institutional investors are seemingly bearish on the broader use case of Ethereum, the world ’s second-largest digital currency by market cap. According to Forbes, cryptocurrency hedge funds and family offices believe Ethereum (ETH) will plummet further in 2018, despite the platform token already falling approximately 40% from its all-time high in December 2017.
Amongst the many is one Hidden Hand Capital, a San Francisco-based family office started by tech entrepreneur Timothy Young. The office reportedly handles $100 million worth of cryptocurrencies and has a “short” position in the ether.
New York-based Tetras Capital is relatively popular in cryptocurrency circles for its coin analyses, and price outlooks recently published a 41-page report explaining its ether short. While the six-person team handles a $30 million fund, founding partner Alex Sunnarborg is aggressively betting against ether and investing substantially in bitcoin.
Sunnarborg acknowledges Ethereum’s concept and overall application but believes the two factors are not enough to make it a good investment. Young partly agrees with the view, and called out the protocol’s “disconnect with price and technology,” However, Young holds an optimistic view of the protocol in the future, and believes developers will fix the infamous scaling issue.
The entrepreneurs further voiced concerns of Ethereum’s inflated $48 billion market, which, according to them, does little justice to the network’s capacity of handling 15 transactions per second. In comparison, payments processor VISA is valued at $314 billion and processes 24,000 transactions per second. Read more from cryptoslate.com…
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