Ethereum is overvalued, says Tetras Capital in study | CriptoNews

Ethereum is overvalued, says Tetras Capital in study | CriptoNews

 tetras-capital-ico-eth "width =" 422 "height =" 270 "data-recalc-dims =" 1 "/> <noscript> <img src= Relationship between financing with ICO and financing with risk capital since 2012. Source: Tetras Capital.

The attached graph, made by Tetras Capital, summarizes the great boom of the 2014 ICOs to date. "The ICO-mania started by Ethereum is growing to this day, although there are some signs of a slowdown, and now we believe that the scenario is ready for a substantial deflation of the bubble ," the document says. ]

For researchers, the only way for Ethereum to grow and consolidate and justify its current valuation is to become a Value Reserve (RV).

This condition can be met, says the study. if it is successful and dominant in some of its primary applications, which are: platform of decentralized applications and capital raising platform.

Regarding the support of the Dapps, after an analysis of the consequences on architecture As the network incorporates an increasing number of decentralized applications, the study points out that a dilemma is created for Ethereum, or larger blocks, that can weaken decentralization or face a crisis. Uncontrolled growth of commissions.

The highest current scrutiny on ICOs is an additional factor that can decrease Ethereum's revenues as host of new tokens but Tetras also points out that while ETH is not considered a value by the SEC, "the same can not be said for most of the ICOs that Ethereum hosts."

Tetras Capital says not sure of the exact scope of a regulatory action on the ICOs that are in Ethereum, but that such an action could "declare the decentralized model of raising money completely out of the law".

The aforementioned risk factors are discussed in the tweet thread in which the study is announced and among the criticisms are mentioned the lack of support, with facts, that effectively the network will not have the sufficient resources to support an increasing number of Dapps. Or if indeed the emergence of new platforms of decentralized applications could weaken the leadership of this network.

Already in mid-April Brendan Bernstein, co-founder of Tetras Capital, had published a study on the relationship between the decrease in ETH price and the decline in the popularity of the ICO, which also argued the regulatory pressure around this form of financing by US and Korean government institutions, two of the main cryptocurrency markets worldwide. .

Featured image from Wit /