Popular crypto analyst Benjamin Cowen says he’s looking at Ethereum (ETH) to determine whether the leading smart contract platform has what it takes to be a store of value.
In a new interview on the crypto channel InvestAnswers, Cowen says that while many investors see gold as a store of value, he emphasizes that the precious metal has remained virtually flat over the last decade.
“What do people mean when they say store value? Do you mean you want it to stay the same price and store the value, or do you want it to increase in value? I think there’s sort of a disconnect there…
That’s one of the things we see on Twitter with gold. There’s a lot of gold investors that like it because theoretically, it’s a store of value, but the problem is it hasn’t done anything in a decade, so while the price is the same that it was 10 years ago, it’s not worth as much because of inflation.”
The crypto analyst argues that Ethereum is actually a better store of value than gold since ETH’s value has gone up nearly 50x in the last 12 months. His caveats for storing wealth in ETH are the potential for drawdowns and exhaustive consolidation periods.
“I do think Ethereum will trend up with time like Bitcoin, and I think the definition of ‘store of value’ applies as long as you have a right time horizon and as long as your definition of store value isn’t that always has to monotonically increase.
If you give it the flexibility to have occasional drops, then I think that makes sense. You can’t really expect something to go up from $100 to $4,800, a 48x in a year and not have some type of a pullback and long consolidation phase. As long as you allow for that, I think you can give it sort of the same narrative.”
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