Opinion piece on investment banks entering the cryptocurrency area and their inefficiency
Today a friend of mine got a call from one of the prominent investment banks in the country we live.
He has an account with this bank and a small investment portfolio. The broker on the other end of the line said "Hi , I've got a good investment for you. It's called Ethereum".
Shortly after that call he contacted me and asked me if Ether were to be a good investment. My opinion was the complete opposite of the sales pitch his broker made. No wonder, it's a sales pitch. Whenever they sell you something they can get commission and bonusses.
At first we had quite the serious argument about me scoulding his broker. I'm just a cryptotrader, not a financial analyst working at a respectable bank so I can see why our opinions were this different.
Some sensible arguments later I got him to change his mind on the Ethereum hype.
Quote: "I'm not saying Ethereum can't be a good investment towards the future. However I don't think buying at the top here is a good trade plan. The price has increased dramatically over the last few months but functionality didn't.
I told him I liked the concept Ethereum and the problems that blockchain solves. I also told him Ethereum faces serious technical, usability and future legal issues that make me choose other crypto assets over Ethereum at this point."
A long story short I think it's scandalous that these investment banks are trying to get their customers to jump into a hype without proper analysis. Here are my key issues with Ethereum.
- Too much supply held by the inner circle
- It's not immutable, going against the very core concept of blockchain
- It was offered as a security, SEC trouble might follow. That security was then manipulated.
- Technical issues and hard forks to solve this
- Security issues are still there after the DAO attack, and the theft of 10M$ by developers in the aftermatch
- Central governence compared to bitcoin that just "exists"
- The price is too high at the moment !
Thank you for reading my this opinion piece. I hope you found some interesting ideas that will resonate.