Jurrien Timmer, manager of mutual fund giant Fidelity Investments, argued in his recent tweets that Ethereum, the largest altcoin project by market cap, is undervalued compared to Bitcoin. Timmer elaborates his arguments with a series of historical metrics. Here are the details…
Jurrien Timmer says Ethereum is undervalued
The executive of Fidelity Investments shared and commented on the following metrics in his recent tweets:
Despite the volatile price action this year, the Bitcoin network continues to grow unabated. Under the Metcalfe Act, I expect this growth to continue to support Bitcoin’s valuation.
Second part:
We tend to look at price, but for me valuation is all about metrics. Here we see the “price-to-network” ratio of Bitcoin. Bitcoin’s fundamentals explain most of its meteoric price gains. Metcalfe’s Law at work. It’s not just about S2F.
- This year, Ethereum has outperformed Bitcoin, posting 260% more gains against BTC. The leading altcoin did this in company with the DeFi and NFT sector.
Third part:
While Bitcoin’s network is growing steadily, Ethereum’s network is growing rapidly. Scale vs Scarcity.
- Timmer’s analysis is based on the growth rate of the Ethereum network. The mutual fund manager predicts that Bitcoin will be surpassed by Ethereum.
Last part:
When we compare the value of BTC to ETH, we see a huge discount for ETH, presumably as investors reward BTC for its superior scarcity dynamics. Whether ETH will continue to catch up with BTC will be something interesting in 2022.
- Timmer assumes that investors continue to view Bitcoin as a superior store of value due to its scarcity.
Leading altcoin project could accelerate transition to PoS Blockchain
Bitcoin faced selling pressure in April-May 2021 due to growing concerns about its carbon footprint. cryptocoin.com As we have reported, electric car manufacturer giant Tesla has therefore suspended Bitcoin payments. JPMorgan analyst Nikolaos Panigirtzoglou says Ethereum will become more of an option than Bitcoin once it moves to PoS. Bitcoin exhibited exponential growth at the start of the pandemic, taking advantage of near-zero interest rates and monetary easing. Experts think that Ethereum can provide the necessary scarcity as it transitions to a deflationary cryptocurrency with the EIP-1559 update.
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