Wall St. – Ethereum needs a ‘filtered message’ to fool executives
The broader market does not reflect the true value of ethereum, which can be adjusted through net messaging to prompt Wall Street investors to offload ether exchange-traded funds (ETFs), officials at institutional investor firm Attest said.
Despite complaints of low appetite for U.S. ETFs and “underperformance” in ETH's own price action, Attestance Chief Trading Officer Steve Berryman and Strategic Advisor Tim Lowe told Cointelegraph that they remain bullish on Ether (ETH).
However, they have their sights set on a number of key developments, including better marketing, diversification and tokinomics, that could lead to renewed appetite for the asset over a longer time horizon.
ETH should get ‘thinking'
Bitcoin (BTC) currently dominates the mind share of digital assets for institutional investors. Being “digital gold” was a simple value proposition — it wasn't hard to sell to the bagmen on Wall Street, Lowe said.
However, Lowe believes Ethereum can easily capture some mindshare with an improved marketing mix and a more unified value proposition, which he sees as a natural value proposition from institutional investors who choose to shift into the asset over time.
“I think the number one motivator for Ethereum is diversification. In traditional finance, almost everyone wants to have a more diversified portfolio,” Lowe said. “
“How do you differentiate? The next step is to ETH.
But the difference can only be made if Ethereum is made easier for non-Ethereum crypto-natives to wrap their heads around.
“Is it an app store? Is it a blockchain-based internet or is it ‘digital oil'?” Low asked.
“At the moment, Ethereum will only be interesting to people who are interested – most people buy Bitcoin ETFs only because they see the best performing digital asset,” Lowe added.
“But eventually, we'll see a more refined message where ETH enters the wider consciousness,” he said.
US Ether ETFs have continued to underperform market expectations since their launch in July, with ETF analyst Eric Balchunas correctly predicting a “small potatoes” debut for the currency against Bitcoin ETFs.
The nine Ether ETFs have seen net inflows of $564 million since launch, and on September 10, the funds snapped an eight-trading day streak in which they had seen no net positive inflows.
Ether ETFs started at a lower price compared to their Bitcoin counterparts. Source: FarSide
Pinching will be a big win.
Staking is another major selling point for Ethereum over the long term, says Berryman, which allows Ether ETF investors to earn around 4% per year by holding ETH through the fund.
Several fund managers, including BlackRock, Fidelity and Franklin Templeton, have tried to get regulatory approval to include shares in ETFs but have been denied by the SEC.
Berryman said that the stock split was a necessary sacrifice for cash at the time, but it will bode well for Ethereum when it is introduced in the future.
“It makes perfect sense to introduce staking at some point. If you're going to stake Ethereum, why don't you get involved?”
Aside from concerns that dividends could be regulated by U.S. securities laws, Berryman said one of the biggest challenges for ETF issuers is liquidity, especially in the short term.
“With these EFAs you have to be able to get in and out quickly and there is no time limit. If there is a long queue, it can take a long time,” he said.
Staked ETH can take days to withdraw – a problem for issuers who need to quickly redeem shares for the underlying asset on demand.
Ethereum is more “hard” than Bitcoin
Although staking is never an option, Ethereum's mining program itself is reason enough to gain exposure to ETH, Lowe added.
While many see Bitcoin as a “harder” asset than Ethereum, due to its 21 million BTC supply, Lowe says Ethereum has a superior economic model for investors attracted to scarcity.
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“When you pay ETH for gas, you're taking bitcoin out of circulation,” he said.
“It's not going to sell to the miners. It is being destroyed and the circulating supply is dwindling.
Halving Bitcoin's block reward every four years introduces significant long-term sustainability issues, Lowe said.
“In terms of pure numbers, it's giving out less Ethereum every year than Bitcoin,” Lowe said, which is a very attractive prospect for value-driven investors over the long term.
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