Vitalik Buterin, the founder of cryptocurrency ether and now based in Singapore, has damning words for digital currencies. Former sworn enemies meanwhile seem to be developing a soft spot for this asset.
The strong words used by Vitalik Buterin came as a surprise. The 24-year-old Russian after all is the founder of Ether, the second-biggest cryptocurrency. Over the weekend, he published following entry on Twitter:
«Reminder: cryptocurrencies are still a new and hyper-volatile asset class, and could drop to near-zero at any time. Don’t put in more money that you can afford to lose. If you’re trying to figure out where to store your life savings, traditional assets are still your safest bet.»
Safe or Not?
The friends of cryptocurrencies were taken aback. Some said that his statement was likely to cause undue alarm among investors. Others took it on the chin: «Ether are my safest investment.»
Buterin, a mathematician who has moved from Swiss city Zug to Singapore, kicked off a boom when he invented ether, a Blockchain-based currency.
Uncertain Boom
In March 2016, one ether was worth 10 Swiss francs (14 Singapore dollars). At the beginning of this year, the currency had reached a record of almost 1,280 francs. Meanwhile, ether has dropped a little to about 900 francs. The market cap is still almost $90 billion, second only to bitcoin with $150 billion.
But Buterin seems uncertain whether the boom is justified and made his concern public in a tweet in December.
Sworn Enemies Turned Supporters
The u-turn by U.S. investment bank J.P. Morgan stands in stark contrast to Buterin’s words of concern. A couple of months ago, CEO Jamie Dimon was scathing about the asset class and threatened to fire staff who traded in bitcoin.
No more. J.P. Morgan now seems an ardent supporter of the coin. Analysts at the bank recently praised bitcoin ETF as the holy grail. Exchange traded funds based on bitcoin gave access to the currency without having to own it, they said. ETF’s were easier to trade and more secure than having to keep bitcoin in an electronic wallet.
Still, when the first ETF on cryptocurrencies receives a license remains to be seen. U.S. regulator SEC currently is looking at the applications by several providers.
