Tetras Capital provides investment advice

Tetras Capital, a hedge fund specializing in blockchain, cryptocurrencies and digital assets, recently announced that they are going to sell ETH and invest in BTC. Interestingly, the publication about this appeared shortly before the recent surge in the price of the cryptocurrency market, when Bitcoin broke through the $7,000 mark. This could be a sign of a bull run, which would certainly benefit Bitcoin investors.

Even taking into account yesterday's price rise in the market, Ethereum is not showing a significant breakthrough. While the prices of most major cryptocurrencies have increased by an average of more than 15% over the past 24 hours, the price of ETH has increased by only 7%.

Tetras' publication states that the Ethereum cryptocurrency is “very overvalued.” Company representatives believe that the reasons for the growth of Ethereum this year were outright speculation in the market. As interest in this kind of manipulative technology decreases, the price of this cryptocurrency will also fall. The publication also states that the market and technology are still too young to make preliminary predictions.

Although speculator investors have been a large part of the cryptocurrency market from the very beginning, many note that they are the main reason for the increased volatility.

There are currently 35 ERC20 tokens on the Ethereum network, each of which is worth more than $100 million. The network is also a platform for more than 1,500 decentralized applications. Even with the Ethereum network carrying out more than 750,000 transactions every day, Tetras argues that demand is “far from what can justify the price of the asset.”

Tetras said that for the cryptocurrency market to reach the trillion-dollar mark, digital currencies must act as a store of value. 

“We believe that ETH lacks the key characteristics necessary to become a dominant store of value, and we also believe that the likelihood that ETH will one day take the lead from Bitcoin - let alone assets like the US dollar or gold - is extremely low."

The hedge fund representatives further clarified that the only way for ETH to become a stable store of value is if it realizes its potential for use. The ETH network is mainly used to create dAPPs and raise capital through ICOs. Regarding the dApp, Tetras representatives said that the platform “has significant technical issues” that will remain over time. These problems will cause people to use “more efficient and less risky platforms.”

The hedge fund's official position is that it is going to short ETH to go long BTC.. 

"As we have already mentioned, we believe that BTC is the most resilient market at the moment. As for ETH, the coming months will be extremely important for its future development. Network load (due to the use of dApps), competition (with other dApp platforms) and regulations will test ETH's strength.".

According to ambcrypto.com