Crypto Analyst: Ethereum is Not Holder Friendly But Perfect for Traders

Paul aka Paul_btc, a crypto analyst and expert, says Ethereum is not holder friendly but perfect for trade.

In fact, his contention is backed by the large quantity of Ether issuance in a day.

Building on his assertion, Paul adds: "Let’s take a look at the daily issuance of ETH tokens. It is quite a lot, and it doesn't decrease. So basically to maintain the price of the market there has to be buying those amount of coins daily."

Ether as the crypto fuel that powers the distributed application on the Ethereum platform which at the moment essentially has no use, he contends:

"Given there is nearly no use for Ethereum yet, then all those buyers have to be holders or speculators."

Good for trade

Currently, Ether is issued at a rate of 5 ETH per block on a block time mark of 12 seconds. 60 mln Ethers have been released before the launch in 2014, and 26 percent of this amount will be released yearly. This will make it 15.6 mln Ether Units annually. It is estimated that by July 2020 above 50 percent of Ether would have been mined.

The issuance rate consequently makes holding Ether not so prudent since the price can go down significantly when the boost is over. This is Paul's prediction:

"Ethereum is good for trades because when there are momentum and good news, buying can be much higher that the daily issuance is making the market go up a lot. But as soon as the hype finishes, the normal use can't handle that kind of daily issuance, and the market will start to go down."

Advice

Paul alleged that there are many questions about Ethereum's future that are begging for answers. "Ethereum does not pass my risk/reward threshold, and I don't hold any. I think Bitcoin's performance and risk/reward is far better than Ethereum," he asserts.

To those who are holding Ether, Paul's advice is that it is better not to hold any, wait for the hype and momentum to start and get in the trend when it's formed and then dump at the top:

"What I would say to holders is that even if they like the tech they can't ignore the currency as they currently do. The economics of Ethereum are terrible. ETC will probably be more holder friendly if they cap issuance as they are proposing, but as of now, it has the exact same issues."

However, Paul recognizes the fact that Ethereum has gone a long way so you cannot discard the possibility of yet another ETH bubble when for some time it can perform great.


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