The cryptocurrency house may department out into three completely different markets — and folks could even cease speaking about crypto as a single entity one 12 months on, predicted Paul Brody, world blockchain chief at EY.

Bitcoin and ether have had a wild ride in current weeks, with billions of {dollars} wiped off their market worth, based on

Bitcoin, the biggest digital forex by market cap, at one level plunged by 30% to hover close to the $30,000 degree. It has since bounced again partially to present ranges of about $38,090, based on Coin Metrics.

There are at the moment three “very completely different” tales occurring within the cryptocurrency house, Brody informed CNBC’s “Road Indicators Asia” on Tuesday.

1. ‘Meme cash’

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This phase of cryptocurrencies “might be categorized as investing as leisure,” Brody stated.

“It is exhausting for me to foretell the place they’ll go, however I do not see them as having a really large future within the ecosystem,” he added.

2. Bitcoin as ‘digital gold’

The subsequent a part of the ecosystem revolves round bitcoin, Brody stated. The digital token has usually been cited as a possible competitor to gold as a hedge towards inflation and safe-haven asset. Nonetheless, bitcoin’s worth volatility tends to be a lot greater as in contrast with gold.

In keeping with Brody, nonetheless, bitcoin is “higher than gold” in some methods.

“When the worth of gold goes up folks mine extra, however you possibly can’t actually do this with bitcoin,” he stated.

The cryptocurrency is restricted and a most of 21 million bitcoins may be “mined” — there are at the moment more than 18 million already in circulation. New bitcoin is created by laptop customers who clear up sophisticated mathematical puzzles, and so they take up loads of vitality.

“Bitcoin is gonna go up if everyone buys into this concept that you need to have some proportion of your … portfolio in bitcoin — that may drive loads of participation,” Brody stated.

Questions stay round bitcoin’s actual place in an funding portfolio, with analysts from Societe Generale saying that it’s still “highly contested.”

3. The Ethereum ecosystem

“The third ecosystem, that would probably diverge right here, is the Ethereum ecosystem,” Brody stated, including that it builds a “complete enterprise ecosystem” round sectors resembling decentralized monetary companies and storage.

Will probably be “pushed by demand for these companies and the expansion of that ecosystem,” he added.

Billionaire investor Mark Cuban is a agency supporter of Ethereum and has stated that “the variety of transactions and the variety of transaction sorts together with the event efforts in Ethereum dwarf bitcoin.”

In the meantime, New York College’s Aswath Damodaran informed CNBC final week that he sees ether — the cryptocurrency that runs on the Ethereum blockchain — as having “a better shot” at becoming a commodity than bitcoin.

For his half, Brody predicted that “we’ll cease speaking, I feel, in a 12 months about crypto as a complete — and begin speaking concerning the Ethereum ecosystem or the bitcoin worth proposition.”

— CNBC’s MacKenzie Sigalos contributed to this report.

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