Bitwise CIO Matt Hougan believes investors should incorporate Ethereum (ETH) into their financial portfolios for balanced investment.
Investing in Ethereum and Bitcoin
In recent weeks, the second-largest cryptocurrency by market capitalization has been discussed among crypto enthusiasts, industry key actors, and regulators for various reasons. Hougan personally selected the crypto asset, emphasizing why investors should retain the coin. He initiated his argument by citing diversification as a rationale for including Ethereum in one’s portfolio.
Three reasons to add ETH to your portfolio, and one important reason to stay BTC-only.
A thread.
— Matt Hougan (@Matt_Hougan) June 20, 2024
Hougan acknowledged that, even though crypto is accepted as a disruptive and innovative technology, the precise contours of the emerging industry still need to be understood entirely. Due to this circumstance, he advised investors to “own the market,” which includes the acquisition of ETH, which has a current market cap of $420 billion.
The Hougan-recommended acquisition ratio is 3:1, representing 75% Bitcoin and 25% Ethereum.
According to the Bitwise CIO’s second logic, Bitcoin and Ethereum have distinct applications. According to Horgan’s X post, Bitcoin is intended to represent the ideal form of money, whereas Ethereum is intended to enable the programmability of money. Ethereum is primarily a technological platform that facilitates the development of new applications that rely on public blockchains, such as stablecoins and Decentralized Finance (DeFi).
Finally, Hougan cited historical data that demonstrated the addition of ETH to a financial portfolio over a complete crypto market cycle to increase an investor’s absolute and risk-adjusted returns compared to a portfolio that only contained BTC.
In conclusion, Hougan suggests that a majority BTC position should be supplemented with a portion of ETH. He is firmly convinced that this provides a more comprehensive understanding of the capabilities of public blockchains.
Securities and Exchange Commission has dismissed its investigation into Ethereum
The Bitwise CIO’s ETH insight is timely, as the coin and its ecosystem are on the brink of becoming a global phenomenon.
The United States Securities and Exchange Commission (SEC) recently terminated its 14-month Ethereum investigation, eliciting a response from specialists such as ConsenSys founder Joseph Lubin. Lubin regarded this as a victory, asserting that regulatory clarity should be achieved without complications.
The coin’s market value has experienced a modest increase due to the dismissal news. The price of ETH was subject to fluctuations at the time of this writing. It trades at $3,515.26, representing a 0.61% increase from its preceding value within 24 hours.
