An executive at financial services firm Fidelity says the investment thesis around Ethereum (ETH) may be easier for institutions to understand compared to Bitcoin (BTC).
In a new interview on the Bankless YouTube channel, Fidelity research director Chris Kuiper says the company’s Ethereum investment thesis could be an easier concept for blue-chip companies to understand.
“With traditional investors, you could probably go to them more easily with something like Ether and show them these things, and they would understand that much faster than the investment thesis for Bitcoin.”
According to Kuiper, to truly understand Bitcoin, institutions should first delve into politics, philosophy, game theory, economics and other concepts, while with Ethereum they are presented with simpler statistics and cash flow data.
“I imagine you could probably stand in front of an institutional investor and say, ‘look here are the metrics, here are the cash flow, put in your input,’ and they look at it as another financial instrument and they say : ‘Oh yes, that seems logical to me.’”
Kuiper says Ethereum’s economic ecosystem can enable institutional investors to create more coherent investment strategies and price analysis.
“It’s not about making point predictions with these models of a certain price, it’s about understanding the probabilities. Investing is a game of probability, so now you can start playing out these scenarios and get some guardrails on what you think are the ranges within which this thing might trade…
You can use these scenario analyzes where you can now understand the probabilities and that way people can assess their position accordingly. That’s how an institutional investor thinks, that’s how a good investor thinks – they think around probability scenario analysis.”
Ethereum is trading at $1,601 at the time of writing, up fractionally over the past 24 hours.
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