I have ventured into investment/finance subs to try to share an investment thesis about Ethereum and Bitcoin that I have been working on. Every single sub except one (I can't name it here because its against the rules) has been incredibly hostile and/or completely unwilling to even consider the possibility of allowing handpicked quality content posts about crypto.I also got banned from Reddit's most popular investing sub earlier today after posting a request to remove the blanket ban for cryptos. I was very careful to be as respectful and empathetic to the mods prior decision to enact a blanket ban, but the mods were very hostile. You can view the exchange I had with one of them this screenshot (he banned me after my last comment). Some users showed interest, but the overall animosity level against cryptos is quite ridiculous, and in retrospect these mods will have to do a lot of explaining to their users if crypto continues their journey into becoming a major asset class.EDIT: I am including the post that got banned below for those thinking that it was mindless shilling or juvenile in any way. Just to be 100%, I had already talked to a mod before posting a request to lift the ban from crypto posts (notice that he specifically said that purely crypto posts were NOT allowed in the sub). I also pointed this out to the second mod that I was talking to that ended up banning me.No Nonsense Investment Thesis for Ethereum and BitcoinHello,I would like to share with this community an Ethereum investment thesis I have been working on for several months now. I am aware that cryptocurrencies are a very controversial topic, but this is a good resource if you are curious about learning more about Bitcoin and Ethereum. The thesis covers some of the basic concepts and value proposition for Bitcoin, but it expands on a full blown technical, economic analysis and practical analysis of how Ethereum relates to it.These are the main points of the thesis:Bitcoin is becoming established as a pristine monetary asset.The Ethereum protocol is much more complex and flexible than Bitcoin's. However, ether is Ethereum's native monetary asset, and it does compete with bitcoin.ETH will become more scarce than BTC. Ether's net issuance rate is projected to become near 0% as soon as the third quarter of 2021, but not later than the end of 2022. This will be primarily possible due to the switch to PoS and transaction fee burning from EIP-1559.Ethereum's network "utility" is hosting its own digital economy, and it is using ether as its primary monetary asset. This means that ether's value as money is not restricted by the supply side scarcity. It is also driven by the demand for it as collateral and a medium of exchange (DeFi and NFTs). Transaction fees are also becoming an important contributor to ETH's demand (ETH's daily fee revenue is about three times as much as BTC's).An argument can be made that demand side impact for money as a facilitator of economic activity is perhaps even more important than its properties related to wealth preservation. This is why the global money supply (the total amount of fiat money in the world) is worth about ten times more than gold's market capitalization (the market price of all the gold in the world).Ethereum's protocol persistence and permanence will cement it as the #1 monetary network. Ethereum Killers are actually Layer 2+ scaling solutions to Ethereum. They will be much more scalable than Ethereum, but permanence is more important than utility when it comes to monetary networks. Other networks will do well, but they must be valued primarily as a stock for a cloud service company as opposed to a monetary asset.Macro factors are lined up for a massive appeal in favor of cryptocurrencies. This will continue to drive the institutional and retail demand for Bitcoin and Ethereum. At the bare minimum Bitcoin and Ethereum should be considered as an important hedge against traditional markets and the prospect of inflation.Ether is not just money. It can be valued as:Monetized CommodityCurrencyBondGrowth Tech StockConsumable ResourceTLDR: Bitcoin and Ethereum are legitimate assets competing for capital allocation with each other as well as traditionally monetary assets (namely gold, bonds, treasury notes and fiat currencies). Their upside potential is vastly superior to any other asset that has come before them. They are risky assets, but a modest allocation can be part of a hedging strategy for any portfolio.
Submitted April 02, 2021 at 03:51AM
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