Why Crypto Investors Are Betting Against Ethereum

Ethereum is the second largest cryptocurrency in the world. This year it successfully increased reaching an increase in 36%. Despite the success, major investors think that ethereum is not that successful and will eventually fail so they are betting against it.

One popular crypto hedge fund, Tetras Capital is known for its broad analyses on crypto prices, shorted ether coins hoping they would go down even further to buy them back at a lower price. They started shorting in early spring of this year. They gave an explaining why they did it. The ether shorting has brought Tetras more than $100 million in assets.

Ethereum strives to become the first global computing platform but investors such as Tetras are deeply worried that a market cap of $48 billion is not justified. That is because ethereum cannot make handle more than 15 transactions per second. ‘’As long as Ethereum doesn’t fix their scalability issues it is highly unlikely they will succeed’’ says Tetras CEO, Mr.
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Young. He also stated that ‘’ Just because something is a good idea, doesn’t mean it’s a good investment’’.

Ethereum’s dApps have less than 5000 active daily users and the network is actually at its full capacity. This brings to network congestion and will lead to increasing fees. Developers are trying to find more ways to improve the network’s capacity. Tetra believes that such great improvements are very distant.

Also, other huge investors seriously consider shorting ether and believe that ethereum is far away from a bear market. For example, Multicoin Capital thinks that the demand for ethereum based tokens is very speculative.

All of these investors and companies think that a regulatory frame would give an advantage for platforms like ethereum or neo and that they will reconsider their current position if that happens.