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According to one cryptocurrency critic, Ether, rather than Bitcoin, has a higher probability of being an asset in a potential blockchain-based future.
Aswath Damodaran, a finance professor at New York University’s Stern School of Business, believes that Ether (ETH) has a higher chance of being a currency than Bitcoin (BTC).
Speaking to CNBC, the NYU professor argued that Ethereum’s upside potential outweighs that of Bitcoin in a possible future paradigm dominated by blockchain-based technology.
According to Damodaran, ETH will trump BTC as a better lubricant for blockchain commerce. As for Bitcoin, the NYU professor said that the premier crypto was a speculative play, adding:
“All that bitcoin bulls seem to talk about, their biggest sales pitch for bitcoin is: ‘Look at how much money I’ve made on bitcoin.’ That’s it, that’s the end of the sales pitch. That’s not a sales pitch. That tells me nothing about the substance here.”
Indeed, decentralized finance as an emerging market segment has grown massively on the Ethereum network. According to DappRadar, the adjusted total value locked in ETH-based DeFi protocols is above $65 billion as of the time of writing.
Uniswap, an ETH-based decentralised platform, flipped Bitcoin on regular revenue earlier in May, demonstrating the magnitude of the trading rate difference between Ethereum and Bitcoin.
Damodaran’s criticism of Bitcoin is not new; the NYU professor previously dubbed BTC a “inefficient currency” in May. Damodaran, widely regarded as Wall Street’s “dean of valuation,” characterised Bitcoin as a “pricing game with no good ending” in August 2017.
The NYU finance professor has advocated for a more complex crypto nomenclature that better captures the distinctions between existing cryptocurrencies. “I think we need to start separating the crypto space into those cryptos that are trying to be currencies, those cryptos that are trying to be collectibles — millennial gold — and those cryptos that are actually commodities,” Damodaran says.
As previously noted, the crypto market is in the midst of a major downtrend, with Bitcoin falling more than 30% in the last eight days. The global market capitalisation has also suffered a significant hit, losing over $800 billion during the same time span.