Analyst Releases 7 Reasons He’s Not Optimistic About Hot Ethereum Crypto

Nick Giambruno, YouTube, Nov. 27, 2018, https://www.youtube.com/watch?app=desktop&v=GGLgKNl-dxk

May 10, 2021

Investment Analyst Nick Giambruno tweeted that he is not so optimistic about the long-term future of Ethereum, the world’s second most valuable cryptocurrency, and gave seven reasons why he is betting against this fast-growing digital asset.

Giambruno, chief analyst of The Casey Report and its premium advisory, Crisis Investing, specializes in big-picture geopolitics and economic trends that help investors stay ahead of the crowd and identify opportunities in overlooked markets across the world.

He previously told Legacy Research Group that Bitcoin was the only other cryptocurrency that can be termed “a truly hard asset” and that all other cryptos, starting with Ethereum, “can be controlled by insiders, development teams, and founders.”

“The folks at the head of Ethereum don’t even know what their monetary policy is going to be in a few years,” he added. “Bitcoin isn’t like that. It’s truly decentralized.”

Ethereum, or Ether, is considered the biggest challenger to Bitcoin. It has in recent weeks set new record-highs and pushed past $4,000 for the first time at around 11 p.m. Sunday ET.

Ether proponents believe it will catch up to bitcoin sometime within the next six years if it continues to perform as it has done in the past.

Here are the seven reason Giambruno disagrees, and why he thinks Ethereum will not challenge Bitcoin in the long-term:

1. It is not immutable and can be censored

Here are 7 reasons I am not optimistic about Ethereum’s long-term future.

#1. It is not immutable and can be censored. The developers can roll back transactions and change the rules whenever they want. They can also be pressured by others – such as governments.
— Nick Giambruno (@NickGiambruno) April 30, 2021

2. Ethereum’s scarcity is artificial.

#2. ETH's scarcity is artificial. The developers – who prefer inflation – control its monetary policy, which is arbitrary, uncapped, and challenging to audit.

What will the ETH supply be in 5 years?

It could be 120 million, 500 million, 200 billion, 2 trillion… nobody knows.
— Nick Giambruno (@NickGiambruno) April 30, 2021

3. U.S. government may consider it the sale of an unregistered security

#3. Ethereum’s large premine created ownership centralization and legal risk as the US government may consider it the sale of an unregistered security. With so much dependent on Vitalik Buterin and others, there is also significant leadership risk.
— Nick Giambruno (@NickGiambruno) April 30, 2021

4. Ethereum network infrastructure is not decentralized

#4. Ethereum’s network infrastructure is not decentralized. Infura, which relies on Amazon, could be a single point of failure.

If Ethereum ultimately depends on Amazon, why not just use a faster and more efficient centralized database system like AWS?
— Nick Giambruno (@NickGiambruno) April 30, 2021

5. There is an unclear Ethereum use case

#5. There is an unclear use case. What real-world problems does Ethereum solve to provide economic value?

Instead, ETH tends to latch on to ever-changing use cases, mostly centered around hype cycles, buzzwords, and narratives that come and go. pic.twitter.com/EKKW8iZaUx
— Nick Giambruno (@NickGiambruno) April 30, 2021

6. The economics of the token model are not appealing

#7. Ethereum is an early-stage experiment and has enormous implementation risk.

The Ethereum ecosystem was not built upon a workable finished product, but rather the ever-changing theories and promises of an alpha-stage experiment. I don’t believe this is a stable foundation.
— Nick Giambruno (@NickGiambruno) April 30, 2021

7. Ethereum is an early-stage experiment and has enormous implementation risk

Describing Ethereum as “decentralized” is misleading because every aspect of it is centralized.

When it comes to decentralization, it's black and white. There are no shades of gray. That becomes crystal clear when something goes wrong.
— Nick Giambruno (@NickGiambruno) April 30, 2021

Bitcoin had already overcome all the challenges facing Ethereum, Giambruno said. “(Bitcoin) works in the real world and it solves probably mankind’s biggest problem which is storing and exchanging value reliably.”

By contrast, Bitcoin has a crystal clear use case. It’s a hard money monetary system that is accessible to anybody and controlled by nobody. It works in the real world and it solves probably mankind’s biggest problem which is storing and exchanging value reliably.
— Nick Giambruno (@NickGiambruno) April 30, 2021

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