‘Ether Has Better Shot at Becoming Commodity,’ says Dean of Valuation

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In Brief
  • Damodaran says ETH has a better upside than BTC, if the future lies in blockchain transactions.

  • The finance expert claims BTC is an instrument of speculation and has no endgame.

  • His comments come amid the record-breaking price crash, from which BTC recovered to $43,000 on May 20.

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Wall Street’s “Dean of Valuation” Aswath Damodaran has argued that ether (ETH) has a better chance over bitcoin (BTC) at becoming a commodity in future. 

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The finance expert, who teaches Finance at the Stern School of Business at New York University, appeared on CNBC’s Street Signs Asia, where, according to reports, he said:

“If the future lies in blockchain transactions — and ether is going to be a better lubricant of those blockchain transactions — you could actually argue that ether has a stronger upside story than bitcoin does”.

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He followed by calling for separation between cryptocurrencies. Rather than bundling them all together, as he suggested they are now. In the interview, Damodaran said the cryptocurrency space should be separated between those that are trying to be currencies, those that are trying to be collectibles, and those that are trying to be commodities.

The professor has been vocally cynical about cryptocurrencies. In his appearance on Street Signs Asian, he singled BTC out for particular criticism, saying he would like an explanation as to an endgame for the world’s largest cryptocurrency. He asked, “Where do you see bitcoin ten years from now, if it’s successful?” before elaborating to say he was yet to receive “anything believable.”

Crypto gets criticisms amid price collapse

Damodaran made his comments amid a crash in cryptocurrency prices on May 19. A crash, in which BTC suffered a record-breaking crash to a low of $30,000. It subsequently regained some ground at $43,000 by May 20, and at time of press, hovered around the $40,000 mark.

Meanwhile, he was not the only one making criticisms about cryptocurrency’s viability as an asset. The vice president for the European Central Bank, Luis de Guinados, voiced his doubts about crypto’s validity. He said in an appearance on Bloomberg TV that cryptocurrency is an asset with weak fundamentals, and not a real investment.

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Dale Hurst is a journalist, presenter, and novelist. Before joining the Be In Crypto team, he was an editor and senior journalist at a news, lifestyle and human-interest magazine in the UK. Cryptocurrency was one of the first subjects he specialized in when first going freelance in 2018, reviewing exchanges and analysing lawsuits.

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