Frank Holmes, CEO, and CIO of investment management firm U.S. Global Investors has said Ethereum is the next cryptocurrency to explode after Bitcoin.
Speaking to Kitco News, Holmes attributed his projection to the increasing use cases of Ethereum in the crypto and the financial world, citing the asset’s smart contract feature. He compared Ethereum’s more use cases to silver.
“It is a smart contract – Ethereum has many more uses than Bitcoin does, the same way silver does…20% of demand for silver is for solar energy. It has a green footprint; viruses can’t live on silver, it has many medical uses. The same thing with Ethereum; it is used for DeFi, for NFTs. It’s a much more important backbone for growth in blockchain,” said Holmes.
At the same time, he acknowledged that the Bitcoin and Ethereum rise mirrors the same phenomenon around gold and silver.
“When gold goes to a 50-day moving average, and it goes up 15-20 percent, silver all of a sudden surges 30 percent. Ethereum is to Bitcoin – it is like silver is to gold. Bitcoin makes the big charge, then all of a sudden, Ethereum explodes to the upside. That’s the sweet spot for us,” he added.
On the flip side, Holmes believes that Ethereum migration to the proof of stake might be the biggest concern. He notes that the upgrade resulting in a supply shrink wouldn’t stop the demand and people mining it.
Bitcoin remains a key player
While projecting Ethereum’s rise in the future, he stated that Bitcoin remains a formidable player considering it is a store of value. He said that Bitcoin’s role stands out considering it can facilitate money transfer immediately and cheaply compared to traditional transfers.
According to Holmes, the current Ethereum mining is more decentralized around the world than Bitcoin miners are.
Furthermore, Holmes called on young investors to aggressively invest in Bitcoin and Ethereum while discouraging them from putting money into gold. According to Holmes, gold is meant for old conversant investors.