Big-money investors are shying away from the bitcoin futures trade and pivoting instead to ethereum futures as expectations for the world’s largest cryptocurrency soften, JPMorgan analysts wrote in a note on Wednesday.
In September, bitcoin futures on the Chicago Mercantile Exchange have traded below the price of an actual bitcoin, the analysts noted.
“This is a setback for bitcoin and a reflection of weak demand by institutional investors that tend to use regulated CME futures contracts to gain exposure to bitcoin,” the analysts wrote.
That dynamic makes the current weakness in futures especially bearish for bitcoin, the analysts wrote.
Meanwhile, institutional investors have begun steadily pivoting to ethereum since August. The 21-day average ethereum futures premium rose to 1% over actual ether prices, according to CME data cited by JPMorgan, showing a “strong divergence in demand.”
“This points to much healthier demand for ethereum vs. bitcoin by institutional investors,” the JPMorgan analysts wrote.
Ether prices have fallen 3% in the last month while bitcoin has fallen 10%.
But others pointed to US domestic policy as the proximate driver of Monday’s dip.
“The Evergrande situation, although big and impactful, isn’t the reason for this sell-off,” said Jamie Cox of Harris Financial Group. “Rather, stalemates in Congress on the debt ceiling, worries on policy changes or mistakes in monetary policy, and a litany of proposed tax increases have dampened the mood for investors.”
Vitalik Buterin has compared the eight founders of the ethereum blockchain to JRR Tolkien’s close-knit “fellowship of the ring”, according to the Financial Times.
Yet, the story of the group is one marked by feuds and competition, with two members splintering off to create ethereum rivals cardano and polkadot. Buterin recently said choosing seven other founders “nondiscriminately” to build the network was his biggest regret.
The 27-year-old is one of the most famous figures in crypto, having come up with the idea for ethereum – a cryptocurrency network on which decentralized applications can be built – in 2013. He was just 19 at the time and 21 when ethereum launched in 2015.
Before that, Buterin had become a fan of bitcoin and crypto technology after being introduced to it by his dad, and went on to cofound Bitcoin Magazine. Buterin still works on the network, driving research and providing new ideas.
Maths whizz Charles Hoskinson quickly became an influential member of the ethereum startup that emerged in 2013. Yet, his time on the project came to an end within months, in part because of his prickly relationship with other founders. Hoskinson wanted ethereum to be a for-profit company, but Buterin wanted it to be a nonprofit platform.
Accounts vary about what happened: Hoskinson says he left, others say Butern fired him. Either way, the two are known to not particularly like each other and occasionally still take digs at the other’s methods.
After leaving ethereum, Hoskinson founded the cardano blockchain platform whose ada cryptocurrency has recently soared to become the third-biggest. Cardano is known as an “ETH killer” as it also lets users build their own projects and is a competitor with ethereum.
English computer scientist Gavin Wood became an important ethereum coder after joining the group in 2014. In fact, he created the first ethereum test network and made a number of other key programming contributions.
Wood left ethereum in 2016, and went on to found polkadot, another ETH killer crypto network focused on trying to link together different blockchains. Polkadot’s dot cryptocurrency has risen more than 500% in the last year as excitement has built around the project.
The polkadot founder has been known to take swipes at ethereum. For example, in 2020 he contrasted its “slow” transaction times with polkadot’s quicker speeds.
Although many of the ethereum cofounders were in their 20s, Lubin was older and more experienced when he came on board in 2013. The Princeton-educated computer scientist worked for Goldman Sachs before becoming disillusioned with traditional finance during the financial crisis.
Lubin founded the for-profit ethereum development company ConsenSys, which has launched a number of different projects on the network. One example is the widely used “wallet” MetaMask. ConsenSys raised $65 million from JPMorgan, UBS and others this year.
Anthony Di Iorio
Anthony Di Iorio was an entrepreneur and bitcoin enthusiast before Buterin asked him to come on board to launch ethereum. Yet, he was reportedly also not so keen on ethereum non-profit direction and took a backseat. He went on to found Decentral, which launched the Jaxx crypto wallet.
Di Iorio hit the headlines earlier this year when he said he was quitting the crypto world and selling his company, partly because of concerns about his personal safety. He said another key reason was to focus on philanthropy.
Mihai Alisie has known Buterin since 2011 when they founded Bitcoin Magazine, one of the first publications solely dedicated to crypto. Alisie was important in setting up the Swiss company that gave ethereum a legal and financial base in its early days.
He was vice president of the Ethereum Foundation – the non-profit organization which supports the network – until 2015. He stepped back to found Akasha, a crypto project looking to harness the technology for social purposes.
Computer programmer Jeffrey Wilke was a key player in the early days of ethereum, writing a version of the platform in the Google Go language. That turned into Go Ethereum, or Geth.
He has since left to form a games company called Grid Games with his brother. Wilcke has said he felt his energy was better spent elsewhere, “away from the drama” of ethereum.
Amir Chetrit is the most mysterious and publicity shy of the group, but was working on a crypto startup called Colored Coins – which Buterin also worked on – when he joined ethereum.
Yet, according to journalist Matthew Leising, who wrote a book about ethereum called “Out of the Ether,” other members thought Chetrit wasn’t pulling his weight. Leising wrote that this led to Buterin kicking him out of the project with Hoskinson.
Michael Wagner has large ambitions for his blockchain-based multiplayer game, Star Atlas. He sees his beta-stage product where players explore outer space eventually morphing into a “metaverse,” and told Insider he wants the user base to expand to “the entire global population.”
A game that can support that kind of user base needs a web-scale, layer one blockchain protocol that’s scalable and low-cost, Wagner said. That’s why he and his team chose to build Star Atlas on solana in August 2020, joining about 20 other projects that had been built on the blockchain.
A year later, Wagner says there’s over 500 projects built on the network, and solana’s SOL token has soared to over $150, boasting a year-to-date gain of nearly 8,300%.
The gain has been in part driven by developers like Wagner, who were looking for a network that could process transactions faster and cheaper than ethereum, the blockchain where most decentralized projects currently exist.
While solana was processing 2,000 transactions per second on Friday, ethereum was only processing about 14, and while each transaction costs about $5 on ethereum, solana boasts a transaction fee of less than a penny.
Developer interest and activity on solana grew so much over the last few months that the network’s transaction load peaked on Sept 14, resulting in an outage of over 17 hours. The company said ”intermittent instability” had disrupted some services on Tuesday, after solana’s transaction load peaked at 400,000 transactions per second.
The network is back up and running now, and Wagner said he wasn’t discouraged by the outage, but rather impressed with the network’s “expediency of resolution.”
“Solana was capable of handling greater than 400,000 transactions per second prior to the failure, which is being rapidly resolved, ” Wagner said. “This demonstrates the true potential of a web scalable blockchain, and furthers my resolve in building Star Atlas with solana as the foundational protocol.”
In the wake of the outage, investors may be wondering where solana will fit into the ecosystem of layer-one blockchains, especially as ethereum stands as the dominant platform for decentralized applications.
Seth Ginns, managing partner at investment firm CoinFund, sees a “multi-blockchain world,” where developers examine the trade-offs of each protocol and choose to build their project on whichever blockchain best provides what they need.
Traditional financial applications that need fast transaction speeds are well suited for Solana, Ginns told Insider. Meanwhile, applications that need strong censorship resistance or a more decentralized protocol may be better suited on ethereum, he said.
Ethereum will soon undergo a massive upgrade known as “Ethereum 2.0,” which will culminate in the blockchain pivoting to a proof-of-stake concept, among other technical updates. That could change how it stacks up against solana, Ginns said, but before that upgrade, developers are flocking to what works for them.
“Both from a utilization perspective and an investor awareness perspective we’re seeing solana really come into one of the top positions among base layers,” Ginns said. “That’s likely to remain the case, even as ethereum goes through upgrades.”
However he noted that solana is still a fraction of ethereum’s network value, and the token is unlikely to unseat the second largest cryptocurrency any time soon.
“We have a saying, ‘you never bet against ethereum,'” Ginns said. “It would be surprising to me if you ever hear me completely writing off ethereum. It just has such a vibrant developer community.”
Ether’s fair value is around $1,500 based on measures of network activity, a JPMorgan global market strategist has said. That’s roughly 55% lower than Friday’s price of around $3,470 for ethereum’s token.
Nikolaos Panigirtzoglou told Insider that the ethereum network is less attractive than the current price of ether suggests, as it’s facing growing competition from blockchains such as solana and cardano.
Panigirtzoglou, who has become JPMorgan’s crypto expert, said he and his team have looked at various measures of activity on the ethereum network to try to work out a fair value for the token.
JPMorgan reckons that a larger base of miners and users implies greater adoption and makes the network more attractive for product developers.
“We look at the hashrate and the number of unique addresses to try to understand the value for ethereum. We’re struggling to go above $1,500,” he said.
“There is a question mark here. The current price is expressing an exponential increase in usage and traffic that might not materialise.”
Ether – the cryptocurrency that runs on the ethereum blockchain – has climbed more than 850% in price against the dollar over the last year during a widespread crypto boom.
Yet Panigirtzoglou told Insider recently that ethereum’s key selling point – that developers can build decentralized apps and smart contracts upon it – “can easily be replicated by other networks.”
“It’s not unique,” he said. “You’re already seeing competition from binance, competition from solana. And there are going to be more in the future.” Panigirtzoglou also cited cardano, which has recently upgraded to allow the creation of smart contracts.
However, Jack O’Holleran, CEO at ethereum development company Skale Labs, told Insider that ethereum is likely to remain the dominant decentralized finance blockchain, especially given upcoming network changes that should help it become larger and faster.
“The vast majority of smart contract developers are building in the ethereum ecosystem,” O’Holleran said. “Despite major partnerships being announced on other chains, we still see the absolute majority of (developers) being pulled into the ethereum vortex.”
Decentralized finance, or DeFi, uses crypto technology to create financial products that don’t require centralized authorities. For example, they could enable trading without clearing houses or “smart contracts” that automatically pay out interest on loans.
Ethereum cofounder Vitalik Buterin has been named on Time magazine’s prestigious list of the world’s 100 most influential people, six years after founding the booming blockchain and cryptocurrency.
In a sign of the growing power of crypto, Buterin appears on the 2021 edition of the long-running list alongside US President Joe Biden and pop superstar Billie Eilish.
Reddit cofounder Alexis Ohanian wrote Buterin’s profile for the magazine, saying: “What makes Vitalik so special … is that he is a builder’s builder.
“No one person could’ve possibly come up with all of the uses for ethereum, but it did take one person’s idea to get it started.”
Buterin came up with the idea for ethereum – a cryptocurrency network upon which decentralized apps can be built – in 2013, after being introduced to bitcoin by his dad. The network was developed by Buterin and seven others, and launched in 2015.
As the cofounder of the second-biggest cryptocurrency after bitcoin he is a highly respected figure in the crypto world, and has racked up 2.4 million Twitter followers.
Ethereum’s native cryptocurrency ether has soared over the last year during a crypto boom and thanks to growing excitement about the network’s uses. It had a market capitalization of $426 billion on Thursday, according to Coinmarketcap.
Ohanian wrote that he’s “never been more excited about the potential of the internet, and that’s largely thanks to Vitalik Buterin.” The Reddit cofounder cited non-fungible tokens – tradable crypto collectors’ items that largely run on ethereum – as one reason for his excitement.
Fellow cryptocurrency enthusiast and Tesla CEO Elon Musk was also named on Time’s list, as were Apple boss Tim Cook and Nvidia chief Jensen Huang.
The cardano network took a step closer this past weekend to competing more fiercely with the larger ethereum network, after a key upgrade meant it could host decentralized finance applications.
But founder Charles Hoskinson doesn’t believe any blockchain will be dominant in the years to come, even the so-called “ethereum killers” like cardano. Much like when the internet became a part of daily life, consumers ceased to question which manufacturer made some of the key pieces of hardware that made connectivity possible.
“You’re not asking – ‘is this a Samsung router? Is this an Apple router?’ and my hope is, that’s what’s going to happen in the industry, where cardano is infrastructure, ethereum is infrastructure, bitcoin is infrastructure,” Hoskinson told Insider in a recent interview.
“Of course we compete under the hood, and businesses, governments and people who care about these things will care about them. But at the end of the day, if it’s going to work for everybody, we have to have that ‘wi-fi moment’ where it’s consumer friendly, and it just works on your phone and you can just set a transaction, you can seamlessly move between things,” he said.
The last in the cardano network’s series of “alonzo” upgrades on Sunday means it’s now possible for the blockchain to run applications such as smart contracts, or host digital collectible tokens – known as non-fungible tokens, for example.
Ethereum, the network that Hoskinson co-founded along with Vitalik Buterin and several others a few years ago, is the largest network with those capabilities, known in the industry as a layer one protocol.
Cardano, solana and avalanche have all seen their respective native tokens surge in price in recent weeks as they roll out upgrades that improve their chances at chipping away at ethereum’s lead.
But Hoskinson said it was less about competition and dominance and more about blockchains working together.
“What’s probably going to happen is we’re going to live on an internet of blockchains,” Hoskinson said.
Right now, the various blockchains can’t yet connect to one another. But thanks to so-called layer zero protocols like polkadot this interoperability will become reality.
“Shark Tank” investor Kevin O’Leary has called on US regulators to set some rules around the cryptocurrency market, saying that no one in finance wants to be “cowboys” about it.
“We want the regulator to actually make some decisions about crypto, because none of us that are in financial services want to actually be cowboys about this,” he said on CNBC’s “Capital Connection” in an interview published Monday. “I don’t want to get involved in crypto if the regulator says it’s not okay.”
The US has no single regulatory agency that oversees the crypto market, as digital assets aren’t classified as “securities.” SEC Chairman Gary Gensler has called the cryptocurrency industry “the Wild West,” and recently urged Congress to provide the agency with more authority to regulate it.
“I can’t afford to be offside. I cannot afford to be non-compliant,” O’Leary said. “If the regulator finally allowed financial services companies to call it an asset, put it into an ETF in the United States – like they have in Canada and other countries – I’d figure there’d be another trillion dollars worth of buying into bitcoin. And we don’t have that yet, but that’s the opportunity.”
Some portfolio managers say although many are excited about bitcoin ETFs, it’s a massive contradiction because crypto investors shouldn’t need a product like that to get into the crypto market. However, traditional investors want an ETF so they can speculate on bitcoin’s price.
“I think, at the end of the day, over the next couple of years, that will happen,” O’Leary said. “That’s why there’s so much interest right now.”
O’Leary, popularly known as “Mr. Wonderful,” also mentioned the SALT event, which will take place in New York from September 12-15. He said the premier hedge fund industry conference, hosted by crypto enthusiast Anthony Scaramucci’s SkyBridge, is about the future of decentralized finance and cryptocurrencies.
“There is not a single hotel room available in New York,” he said. “We are jam-packed. This is like ‘Bitcoin 2021.’ All the institutions are coming to the conference to discuss this very topic.”
Cryptocurrencies have exploded in popularity over the last several months. Of course, the most popular remains bitcoin.
But some other smaller cryptos are gaining serious steam as well, as the concept of digital currencies continues to seep into the public consciousness.
However, it can be difficult to know which cryptocurrencies to invest in, or whether you should in the first place. There are currently thousands of different types of coins on the market. And some – like dogecoin, which was founded as a joke – don’t appear to be serious. Others, like some built on the Ethereum blockchain, appear to have better use cases.
Crypto is an esoteric domain – its intricacies can be difficult to understand, especially for those new to the space.
To help cut through the noise, Insider has talked to several experts about which altcoins – cryptocurrencies other than bitcoin – they believe have the best upside. These experts also described the fundamentals and technicals that make these altcoins attractive. Their views are shared in the articles below.
Ran Neuner, the cofounder and CEO of blockchain investment fund Onchain Capital, is very excited about one crypto right now: solana (SOL). He told us why the ethereum competitor could be the biggest opportunity in crypto since 2018.
Crypto technical analyst Adrian Zduńczyk says some altcoins due to outperform bitcoin in a “legendary” way. Zduńczyk is the founder and CEO of the Birb Nest, a trading platform. He shared five altcoins with us that he thinks could surge 10-100 times.
Ethereum is the second-biggest cryptocurrency at the moment, sitting behind bitcoin. But it has problems like expensive transaction fees. Matthew Sigel, head of digital asset research at VanEck, shares three altcoins to rival ether.
Ethereum’s major upgrade in early August led to a 9.6% intraday price spike, and investors haven’t yet sold the positive news. That’s one reason why David Gokhshtein is bullish. He also told us his theses for six smaller altcoins he owns.
Various cryptos tumbled on Tuesday September 7 as El Salvador officially adopted bitcoin as legal tender. By the following morning, more than $3.25 billion in crypto positions had been liquidated over 24 hours, affecting more than 300,000 traders, according to Bybit. We asked experts what was driving the sell-off, and where they recommended buying dips.
When dogecoin rose over 12,000% to $0.68 earlier this year, it shocked the investing community. It has since cooled off, though its price has picked up in recent weeks. It now sits around $.027. What will it do next? Chainalysis chief economist Philip Gradwell broke down why he think it will go to $1.
As some altcoins have shown, there is potential for huge appreciation in crypto outside of bitcoin. David Gokhshtein is one investor that’s looking to take advantage of these opportunities. He shared two altcoins he’s bullish on.
The broader crypto space just went through a rough patch after huge gains earlier this year. Like any asset class, it has its bull and bear markets. When crypto bear markets do come, crypto influencers Mack Lorden and Lucas Dimos told us that six altcoins in particular help them hedge losses.
Many altcoins are built on top of the Ethereum blockchain. Aya Kantorovich, the head of institutional coverage at crypto exchange FalconX, shared nine coins built on top of the ethereum blockchain that she thinks have solid use cases.
“I personally always like coins with application,” Kantorovich said.
Link, bitcoin cash, XRP, dogecoin, dot and litecoin soared to new multi-month highs on Monday as investors opted for cheaper alternatives to bitcoin whose networks can support decentralized finance applications and smart contracts, analysts said.
A smart contract is a piece of code that allows people to enter into financial agreements without the need for a centralized player like a commercial bank or broker.
Thanks to their ability to run smart contracts, blockchain networks like ethereum have been able to do more than just host cryptocurrencies. They can include different layers of software, host non-fungible tokens and more. The bitcoin network is slower, more expensive to use and generally does not handle this type of application.
Bitcoin is still the largest cryptocurrency by market value by a long way. But it’s lagged behind some of the smaller tokens in recent weeks.
“What makes bitcoin less popular is its high cost and its enclosed nature when compared with that of ethereum and other smart contract-enabled altcoins,” Yuriy Mazur, head of data analytics department, CEX.IO broker, said.
“The crypto community believes altcoins can go up 5x or even 10x over the next several months, while Bitcoin will slowly grind higher,” Edward Moya, senior market analyst at OANDA said.
Link climbed the most by as much as 18% over the previous 24 hours to reach a session high of $36.35 – its strongest since May 19 – and was last up 6.8% at $35.79, compared with a gain of 1.65% in bitcoin, according to Coinmarketcap. The coin has rallied 45% in the last month, compared with a 15% rise in bitcoin.
“At this pace, we can see the digital token rise to $50 in approximately 14-21 days. We can face correction along the way, but the growth surge is more likely at this time,” Mazur said.
Chainlink underpins the link token and offers smart contracts much like the ethereum network. The company said in a tweet last week that a record 76 new integrations took place on the network in August, bringing the total to 755. on any blockchain like ethereum.
“It seems that the demand for chainlink is growing, as well as its utility,” Mazur said.
“Additionally, the growth recorded in the past month has highlighted the relevance the token has continued to print, extending its lead as the first network to allow the integration of off-chain data into smart contracts,” he added.
Ether was last up around 0.6% at $3943, while other coins like XRP rose almost 8% to $1.37, and polkadot’s dot was up about 2.0% at $34.25.
Cardano’s ada hit record highs last week ahead of this month’s “alonzo” network upgrade, but lagged the rest of the crypto complex, easing by 0.4% to around $2.856.
“Now amongst the favorites of crypto enthusiasts are ethereum and cardano, which have shown impressive results lately and are going through the era of hard forks. Ethereum has already had an update, and a cardano update is coming,” Mazur said.