Keep Your Eyes on Ethereum

Ethereum needs a better publicist.

Bitcoin grabs all of the headlines. Yesterday we learned Goldman Sach jumped on the bitcoin bandwagon and will soon be offering bitcoin investment vehicles to its wealthiest clients. BlackRock has quietly begun trading bitcoin futures. And last week, we found out that Fidelity wants to create a bitcoin ETF.

For most assets, that’s a year’s worth of news in less than two weeks. But for bitcoin, it doesn’t even begin to scratch the service. Plus, bitcoin drives the market. And it’s the only crypto most people have heard of. So to a certain degree, it makes sense that bitcoin news — good and bad — crowds out everything else.

But over the last 15 months, ethereum is up 1,393%. Meanwhile bitcoin is up “just” 728%. Ethereum is vastly outperforming bitcoin. And nobody is talking about it.

That changes today.

Ethereum is distinctly different from bitcoin. Bitcoin has emerged as a store of value. Ethereum is a network that people can program apps and smart contracts on. The Ethereum network dominates the decentralized app (Dapp) world. More people develop Dapps on Ethereum than on any other network. 

Plus, the two hottest trends in crypto — decentralized finance (DeFi) and yield farming — run mostly on the Ethereum network.

DeFi is a global and open alternative to financial services like savings, loans, insurance and much more. Yield farming focuses on lending. People lend crypto to others using smart contracts. And they earn rewards in the form of crypto for making the loan.

So people are actually using ethereum today to build the infrastructure and tools that will be disrupting the financial services industry for decades to come. 

And the people developing the Ethereum network are hard at work improving it. It looks like Ethereum 2.0 will launch in October. That will move ethereum to a proof-of-stake environment. The belief is Ethereum 2.0 will make the network cheaper to use and easier scale. If Ethereum’s developers are correct, it will be a massive leap forward for the network — and the apps and contracts that run on it.

If you don’t understand the technical details behind Ethereum 2.0, that’s OK. All you really need to know about ethereum is:

• It’s the most popular platform for developing Dapps and smart contracts.
• Its potential to disrupt is massive. Ethereum is already being used to disrupt the financial services industry. And that’s just the beginning of what it could do.
• Developers are hard at work making the network more efficient and scalable.

There’s no guarantee that the bull case for ethereum comes to fruition. But I like its chances. The people working the Ethereum network are smart, dedicated and committed to developing it into a transformative technology. And if it continues to grow and scale, the network’s upside is massive.

The market opportunity is so big that other crypto projects will try to challenge Ethereum. There are plenty of challengers already. But so far, Ethereum has been resilient. It remains the dominant player and a key holding in the First Stage Investor crypto portfolio.