Blockchain investor O.D. Kobo (Oded Kobo) states Ethereum continues to be his preferred investment as it is a play on the technology as opposed to Bitcoin's appeal as an inflation hedge.
Hong Kong born Kobo is co-founder of digital asset investment firm Annex Capital, he is regarded as an expert in the space and has been ranked amongst the world’s top richest people in crypto.
Kobo believes we are currently in the ‘Alt season’ of the crypto market, a term for a period where alternative coins outperform Bitcoin, presenting a far wider range of investment opportunities than a focussed Bitcoin rally.
The two big cryptocurrencies Bitcoin and Ethereum recorded all-time highs in November, but Ethereum continued to outperform the legacy coin.
The performance of the two coins reflects experts opinion that the real use cases of Ethereum blockchain could soon make Ethereum a dominant crypto, an opinion which Kobo greatly supports.
He adds “Ethereum, as compared to Bitcoin, is seeing a much greater association with ancillary growth sectors in the cryptocurrency world, including decentralised finance (DeFi), non-fungible tokens (NFTs), and metaverse. The current Bitcoin trading window seems to associate the asset more with global currency trends, inflation hedges, etc., from a current market perception standpoint, higher correlations with the growth of crypto sub-sectors, Ethereaum is a play on technology, Bitcoin’s appeal is an inflation hedge”.
Ethereum has consistently stayed ahead of Bitcoin for nearly eight months this calendar, clocking gains to the tune of 500 percent year-to-date. Bitcoin's gains were a little short of 100 percent during the same period. In terms of market capitalisation though, Bitcoin's $1 trillion is twice that of Ethereum. However, it is also important to note that the two blockchains serve different objectives. The Bitcoin blockchain is a secure peer-to-peer (P2P) digital cash transaction system. It is a highly secure digital ledger with Bitcoin as a native currency. It derives value solely on the basis of the demand-supply dynamics. The Ethereum blockchain, on the other hand, has gone a step further by adding a system of smart contracts. These contracts allow two individuals to execute transactions without any intermediary. This makes it more attractive for global financial applications. Its latest ‘Altair’ upgrade has also made it incredibly fast and more scalable.
“Developers are adding all kinds of new concepts to the Ethereum universe, it’s amazing to witness. From explosive growth markets like NFTs to more abstract concepts like the metaverse, the Ethereum universe is continuously expanding” says Kobo.
He adds, “Ethereum-hosted gaming apps like Axie Infinity are creating entirely new markets. DeFi protocols and products have expanded to collect $280bn of assets between them, with Ethereum still the dominant leader.”
Bitcoin may lose some of its appeal as a hedge against a devalued currency, Ethereum is outperforming as its proponents see the potential in the solutions enabled by the underlying technology.
"People see Ethereum as an investment in technology, it’s what I see. I am a technology investor" Kobo said. While Bitcoin remains the most dominant cryptocurrency, its market share has dipped to about 40%, down from 70% as investors turn to other digital assets.
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