$1,000,000,000 Crypto Fund Moves Into Bitcoin, Two Ethereum Rivals As Big Risk Emerges, CIO Says
The Chief Investment Officer of Valkyrie Investments says the crypto asset manager is turning to fly-to-safety assets like Bitcoin (BTC) as The Merge approaches.
In a new interview with Bloomberg Technology, Valkyrie CIO Steve McClurg says that as Ethereum (ETH) prepares to transition to a proof-of-stake consensus mechanism in September, the crypto asset manager is exiting all of its positions in the second largest digital asset.
McClurg says Valkyrie, which has about $1 billion in assets under management, is moving its funds into Bitcoin and other smart contract blockchains such as Avalanche (AVAX) and Zilliqa (ZIL).
“Right now, Bitcoin is really the security for a lot of our funds…some of the more established proof-of-stake protocols are also a great place to be. Places like Avalanche and Zilliqa…
So we’re really moving out of anything that has too much exposure to ETH right now until we see this coalesce sometime [the] the middle [of] September and into some of the more secure major crypto protocols.”
McClurg says Ethereum’s upgrade to a proof-of-stake consensus mechanism comes with trade-offs that could pose significant risk to investors.
“I don’t necessarily think that a move to proof-of-stake is a big thing for Ethereum in the short term. In the long run, it may actually work out.
But the Ethereum network is actually more secure as proof of work. What really makes Bitcoin the most secure network is a long period of time through proof-of-work where you essentially have computers or validators validating transactions all over the world in a decentralized way. When you move to proof-of-stake, it really falls into the hands of a few.”
The CIO also says that Ethereum’s security after The Merge must prove itself before investors holding large amounts of funds on the network can feel safe.
“But in relation to [how] Ethereum is going, the security has to be seen, how it is going to work. Because we really think that if you have a million-dollar-plus NFT and you’re relying on the Ethereum network and it’s changing right now, maybe that’s not a great place to be right now.”
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