Top 3 Reasons To Buy Ethereum: Bitwise CIO
Bitwise CIO Matt Hougan thinks that investors should add Ethereum (ETH) to their financial portfolios. He encouraged them by outlining three major reasons why they should do so.
Investing in Bitcoin and Ethereum
The second-largest cryptocurrency by market capitalization, Ethereum, remains a hot topic among crypto enthusiasts, industry key players, and regulators. Hougan highlighted why investors should consider holding this digital asset. He kicked off by citing diversification as a significant reason to include Ethereum in one’s portfolio.
Hougan pointed out that although crypto is recognized as a new and disruptive technology, the exact direction of the industry isn't fully clear. Due to this uncertainty, he advised investors to “own the market,” which includes acquiring ETH, currently holding a market cap of $420 billion. He recommended a 3:1 ratio, suggesting 75% in Bitcoin (BTC) and 25% in Ethereum.
Different Use Cases of Bitcoin and Ethereum
For his second reason, Hougan mentioned that Bitcoin and Ethereum serve different purposes. Bitcoin is created to function as the best form of money, while Ethereum’s design aims to make money programmable. Ethereum serves as a technological platform for new applications that depend on public blockchains, such as stablecoins and Decentralized Finance (DeFi).
Boosting Portfolio Returns
Lastly, Hougan pointed to historical data, showing that adding ETH to a financial portfolio has historically increased both absolute and risk-adjusted returns compared to having only BTC. Hougan strongly believes adding some ETH to a primarily BTC position provides broader exposure to the vast functionalities of public blockchains.
SEC Dismisses Ethereum Investigation
The Bitwise CIO’s insights come as Ethereum and its ecosystem are gaining global prominence.
The United States Securities and Exchange Commission (SEC) recently closed its lengthy 14-month investigation into Ethereum, leading experts to have varied reactions. The news positively impacted ETH's market value, causing slight price increases. As of now, ETH is trading at $3,515.26, marking a 0.61% rise in the past 24 hours.
