Why Does Fidelity Director Think Ether Is Undervalued?

• Jurrien Timmer, director of Fidelity Investments, believes Ether, the biggest altcoin, is even more undervalued compared to Bitcoin.

• The upcoming transition of Ethereum to proof-of-stake makes it better than Bitcoin, says JPMorgan analyst Nikolaos Panigirtzoglou. Besides, there are also concerns regarding the carbon footprint of Bitcoin.

• Being a firm believer of Metcalfe’s Law, which means that the value of a network and user’s growth are related proportionally, Trimmer doesn’t think that the Bitcoin price appreciation is because of its stock-to-flow model.

Putting forward his argument in a recent tweet, director of global macro at mutual-fund behemoth Fidelity Investments, Jurrien Timmer, said Ether, the top altcoin, is more undervalued than Bitcoin.

The boom experienced by the Ethereum Network is the basis of Trimmer’s argument. Putting forward his realization, he said that Ethereum has significantly overtaken Bitcoin.

Trimmer also thinks watching the “Flippening” would be fascinating over the next few years.

Flippening is the term coined in 2017 that refers to the possibility of the market capitalization of Bitcoin (BTC) being overtaken by the market capitalization of Ethereum (ETH).

Outperforming Bitcoin by a considerable margin, the Ether has gained 260% against the top cryptocurrency. The explosion of NFTs and the outstretched DeFi landscape has brought attention to the No.1 altcoin.

Among all the speculations, there are also raising concerns regarding the high carbon footprint generated by Bitcoin. According to the JPMorgan analyst Nikolaos Panigirtzoglou, 

Ethereum’s forthcoming transition to proof-of-stake makes it a better choice than the top cryptocurrency, Bitcoin.

Nonetheless, Trimmer thinks that the scarcity of Bitcoin will continue to attract investors and will continue to hold its superior value. The near-zero interests and monetary easing that started along with the Covid-19 pandemic have benefitted the flagship currency.

There are still nagging concerns regarding the malleable monetary policy of Ethereum even though it had its first deflationary week followed by its major EIP-1599 update.

It’s More Than Stock-To-Flow 

Trimmer strongly believes in Metcalfe’s Law, according to which the value of a network is proportional to their user’s growth, and doesn’t owe the Bitcoin price appreciation to its Stock-to-flow model.

“Bitcoin fundamentals explain a lot of the price growth. Metcalfe’s Law in Action. It’s not just about S2F.” he said.

The Fidelity executive predicts the user’s growth to remain the driving force behind the rise of Bitcoin’s prices.