Since my last commentary about 5 weeks ago, ethereum (ETH) has rallied
240% (from $12.45 to $42.40). This rally was on the back of
"enterprise ethereum", an announcement by some of the world's largest
tech, financial, and even oil companies, that they will be jointly
developing the ethereum platform. While I remain very bullish on
ethereum, it is now an oversized portion of our cryptocurrency
portfolio. I suggest rebalancing to bring eth back down to 50% of
your cryptocurrency portfolio and reinvesting the profits in bitcoin
There are a few upcoming ICOs (initial coin offerings, similar to
equity IPOs) that I think are extremely promising and in which I am
planning to invest heavily. They are operationally demanding to
invest in. Let me know if you're interested in participating.
This last paragraph is some "inside baseball." First, the SEC
rejected the Winklevoss twins bitcoin ETF proposal, and their
reasoning suggests they'll reject similar proposals in the near
future; this was expected but was still disappointing. Second, the
bitcoin community has faced serious infighting for 2 years over how to
"scale" the network - allow it to handle more transactions per second.
This infighting took on increasing political importance and personal
animosity, culminating recently in one faction, "bitcoin unlimited",
having the majority of their nodes taken down by a "zero day" attack.
While this infighting slows bitcoin's technological progress, it
renders it extremely stable as "digital gold." As a former political
science major, allow me this analogy: ethereum is like the French
government immediately after the French Revolution: the community has
total faith in its leadership to implement fast and radical change.
Bitcoin is like the American government post American Revolution: its
community emphasizes checks and balances and a constrained pace of
change for the sake of stability and security. Ethereum is perfectly
suited for its role as a rapidly evolving technological platform,
while bitcoin is well suited for its role as a technologically stable
store of value. The SEC decision and political infighting have kept a
lid on bitcoin prices recently, but I expect that to be short-lived.