$1,000,000,000 Crypto Fund Moves to Bitcoin and Two Ethereum Rivals as Major Risk Emerges, Says CIO CryptoBlog
The Chief Investment Officer of Valkyrie Investments said the crypto asset manager is turning to security assets such as Bitcoin (BTC) as The Merge approaches.
In a new interview with Bloomberg Technology, Valkyrie CIO Steve McClurg said that as Ethereum (ETH) prepares to transition to a proof-of-stake consensus mechanism in September, the crypto asset manager exits all of its positions in the second-largest digital asset.
McClurg says Valkyrie, which manages around $1 billion in assets, is moving its funds to Bitcoin and other smart contract blockchains such as Avalanche (AVAX) and Zilliqa (ZIL).
“Right now, bitcoin is really the flight to safety for much 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 straying away from anything too exposed to ETH right now until we see that meltdown someday in [the] environment [of] September and in some of the largest and most secure encryption protocols.
McClurg says Ethereum’s upgrade to a proof-of-stake consensus mechanism comes with trade-offs that could pose major risks for investors.
“I don’t necessarily think the move to proof-of-stake is a good thing for Ethereum in the short term. In the long run, it might actually work.
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 thanks to proof of work where, essentially, you have computers or validators, which validate transactions all over the world in a decentralized way. When you move to proof of stake, it really falls into the hands of the few.
The CIO also says that Ethereum’s security after The Merge will have to prove itself before investors holding large amounts of funds on the network can feel safe.
“But in terms of [how] Ethereum goes, security will have to be seen, how it will work. Because we really think that if you hold an NFT over a million dollars and you rely on the Ethereum network and that’s changing right now, maybe it’s not a good place to be right now moment.
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