By
Steve Muchoki
April 26th, 2024
Ohanian says that the flexibility that the Ethereum platform provides its developer to build decentralized applications makes it to be a bigger bet over Bitcoin.
Alexis Ohanian, the co-founder of Reddit believes that Ethereum will carve out a similar success story this year the way Bitcoin did in 2017. Bitcoin surged from $1000 at the start of 2017 while to go make a high of $20000 in mid-December, similarly, Ethereum which is currently trading at $716.20 (according to CoinMarketCap) will rise till $15000 levels, says Ohanian.
This means that Ethereum will surge to uproot Bitcoin from its number 1 position with its market cap going into trillions of dollars. Ohanian is no more involved in Reddit’s day-to-day operations and now a full-time investor working at his own venture capital firm Initialized Capital which he founded six years back in 2012.
Ohanian made this Ethereum prediction during a recent interview with Fortune, where he said that the Ethereum project has certainly a lot more potential than any other cryptocurrency project existing currently. He also said that Ethereum certainly provides developers the flexibility to create blockchain applications, which is now being realized and hence there is every possibility that it could rise faster than Bitcoin this year.
Ohanian said: “I still hold a little bit of Bitcoin, and I think it has such mindshare that it will continue to be a store of value. I’m most bullish about Ethereum simply because people are actually building on it.” He further added: “ At the end of the year, Bitcoin will be at $20,000. And Ethereum will be at $15,000. Great, now people can call me out if I’m wrong.”
In the interview, Ohanian further said that his venture capital firm Initialized, which has a big investment in crypto-exchange Coinbase, will be having a major focus on blockchain-related investments this year.
Ohanian said “Last year, it was all about AI and machine learning, This year, it’s all about blockchain. Most of it is just hype and BS, just like how it was with AI and ML. Most of the really vital, protocol-level, basic infrastructure around software and blockchain will need to get built in the next year or two for us to really see the Web 3.0 we’re really hoping for.”
He later concluded by saying “These are the types of things I think will build the foundation for a very different, much better Internet. I was a kid in the 90s without much leverage when the first Internet was being built, so I see this as a hell of an opportunity. We’re still figuring it out. We still don’t have a Netscape, but it’s coming.”
SEC and CFTC Sparks Controversy By Regarding Ether Tokens as Securities
However, the latest report from the Wall Street Journal suggests that America’s two major regulatory bodies the U.S. Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) are currently discussing whether or not Ether tokens should be treated as securities.
The report says that the two regulatory bodies are now questioning that whether creators of digital currencies, except Bitcoin, ‘exert significant influence over their value in the same way a company’s stock price depends on its managers and their strategy, performance and investments.’
The regulators now believe that Ethereum which was created for years back in 2014 was probably created with ‘illegal security sale’ and is currently in the ‘grey zone’. The SEC says that in the past, it views digital currencies as securities and the company offering this token should be registered with the regulatory agency. SEC says that the founders didn’t register with the agency for the sale of Ether tokens.
The WSJ notes that the Ethereum Foundation raised nearly 31,000 Bitcoin amounting to $18.3 million at that time. In exchange, it sold about 60 million Ether tokens. Although the money raised was used in building the Ethereum platform, the regulatory agency argues that investors bought the Ether tokens in anticipation that the asset will rise in value over the period and hence the deal rembles to that of being a security.
This news has certainly sparked a big controversy and the Ethereum community and supporters have fired back at these allegations. MIT’s Business of Blockchain Conference, ex-CFTC chairman Gary Gensler said, “There is a strong case for both of them [Ether and Ripple] — but particularly Ripple — that they are noncompliant securities.”
Another lobbyist group Coin Center published a detailed report called “No, ether is not a security” in a major response from research director Peter Van Valkenburgh. He outrightly rejected SEC claim saying Ether can be regarded as securities and further added that “Gensler himself suggested why this could be the case when he distinguished between the Ethereum Foundation in 2014 and the Foundation and the Ethereum network, as a whole, today.”
While all this has been going on recently, this Monday Ethereum founder Vitalik Buterin announced a great news for Ethereum supporters and the overall community stating that the much-awaited scalability solution ‘Sharding’ is coming soon to the Ethereum platform.