In a new interview on the Bankless YouTube channel, Fidelity’s director of research Chris Kuiper says that the firm’s Ethereum investment thesis could be an easier concept for blue-chip firms to understand.
“WIth traditional investors, you could probably more easily go to them with something like Ether and show them these things and they would grasp that much quicker than the investment thesis for Bitcoin.”
According to Kuiper, to truly understand Bitcoin, institutions would first have to dabble in politics, philosophy, game theory, economics, and other concepts while with Ethereum, they can be shown simpler metrics and cash flow data.
“I imagine that you could probably get in front of an institutional investor and say, ‘look here’s the metrics, here’s the cash flow, put in your inputs,’ and they’re looking at it like another financial instrument and they’re like ‘oh yeah, that makes sense to me.’”
Kuiper says Ethereum’s economic ecosystem may allow institutional investors to construct more cohesive investment strategies and price analyses.
“It’s not about making point predictions with these models of a certain price, it’s about getting their head around the probabilities. Investing is a game of probability, so now you can start playing out these scenarios and you can get some guardrails about what you think are the ranges that this thing could trade within…
You can have these scenario analyses where you can now get your head around the probabilities and then that way people can size their position accordingly. That’s how an institutional Investor thinks, that’s how a good investor thinks – they think around probability scenario analysis.”
Ethereum is trading for $1,601 at time of writing, a fractional increase during the last 24 hours.
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