Ethereum’s value lies in not just its technological capabilities, but also in its network effect, said Ran Neuner, co-founder of Crypto Banter, host of CNBC’s Crypto Trader and CEO of OnChain Capital.
Speaking to Michelle Makori, editor-in-chief for Kitco News, Neuner said that should Ethereum be priced using comparable network metrics as Bitcoin, the price should be several times higher.
“If you compare where the Ethereum network is versus the Bitcoin network, and you say on a like-for-like basis, what should Ethereum be trading at? You get a valuation, according to Metcalfe’s Law, of Ethereum at about $6,000,” he said.
Ethereum is currently trading $2,400, and is therefore “very, very underpriced,” Neuner noted.
However, the similarities between Bitcoin and Ethereum end there.
“I think comparing Bitcoin to Ethereum is a very bad thing…that’s like comparing gold to Amazon,” he said. “The only thing is that they’re both crypto currencies and they’re both used on blockchain but they’re two completely different things. Bitcoin is a store of value, it’s a value transfer between me and you. That’s what Bitcoin does and it does it really well. Ethereum, however, is a world supercomputer that is decentralized.”
On Dogecoin, Neuner said that the crypto that skyrocketed more than 500% in less than three days in mid-April has no intrinsic value and is a pure speculation play.
“Dogecoin is at best a meme coin. It is a useless piece of technology, which is not very secure. It was designed as a joke, it was designed as a meme. They called it a small change coin,” he said. “It was designed badly on purpose.”
Additionally, unlike Bitcoin, there isn’t a finite amount of Dogecoin as more of it can be created. Neuner compared this feature to the U.S. dollar, another currency that does not have a hard cap on supply, which he also referred to as a “meme coin.”
Dogecoin’s popularity was driven up in part by TikTokers, who see this is a kind of “freedom coin,” according to Neuner.
“What happens next? One of two things: one, it crashes, all these TikTokers get wiped out, and it’s just another one of these pump and dump schemes. Dogecoin has done [this] several times since 2017, it goes up, and then it somehow goes down. Or two, the TikTok generation actually adopts this as their cryptocurrency,” he said.
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