Aswath Damodaran, a professor of finance at NYU’s Stern School of Business, believes Ethereum (ETH) is better positioned to become a commodity compared to Bitcoin (BTC). Damodaran shared this thought during an interview on May 20, noting that the blockchain will power future transactions. With this in mind, he said transactions on the Ethereum blockchain are smoother and faster than those on the Bitcoin network. As such, ETH has a stronger upside story than BTC.
In the interview, Damodaran said BTC does not have an end game. According to him, BTC has become a speculative instrument that people try to make money on. He added that the coin had not found a foundation that will facilitate its use as a currency.
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He went on to note that BTC bulls only talk about how much they have made through the coin every time they try to convince buyers it is a worthwhile investment. Bashing this approach, Damodaran said showing how much one has made by investing in BTC is not a sales pitch, seeing as the pitch says nothing about BTC’s substance.
BTC’s plunge is not a healthy correction
Explaining whether BTC’s recent plunge below $40,000.00 (£28,280.00) is a healthy correction, Damodaran said investors are reacting to the coin’s price instead of debating on its end game. As a result, the coin experiences major price swings, which can’t be considered healthy corrections. He added that,
I wouldn’t be surprised if bitcoin is up 20% tomorrow, down 25% the day after. This has become a purely speculative game.
While he claims that ETH has a better shot at becoming a commodity than BTC, Damodaran believes that none of the cryptocurrencies in the market today qualify to become a currency. However, he is bullish that there soon will be such a coin, and that crypto enthusiasts have to stop bundling all the coins as one before such a coin can become available in the market.
This news comes as the crypto market tries to recover from its massive drop over the past week. At the time of writing, 1:40 PM UTC, BTC is up 20.08% over the past 24 hours to change hands at £41,975.52 (£29,657.03). On the other hand, ETH has gained 24.69% over the last 24 hours to trade at$2,971.54 (£2,099.490.