- Benjamin Cowen explains his preference for Bitcoin over Ethereum due to better risk-adjusted returns and discloses his bias from successful past trades.
- His analysis shows Ethereum’s performance against Bitcoin may be tied to global monetary policies, with Cowen cautioning against trying to predict market shifts.
- Cowen examines ETH’s market cycle, suggesting economic conditions affect its performance, but remains cautious and Bitcoin-focused due to Ethereum’s uncertain short-term potential.
Full Disclosure: Why Cowen Doesn’t Buy ETH Right Now
Ben Cowen, a well-regarded crypto analyst, shares his perspective on Ethereum and why he hasn’t invested in it for years. In a recent YouTube video, the analyst explains that, to him, the risk-reward ratio is much better with Bitcoin compared to Ethereum.
I have not bought ETH in years… It does not provide as attractive of risk-adjusted returns as Bitcoin does.
Ben Cowen Despite acknowledging that Ethereum has made gains, Cowen’s strategy has leaned towards Bitcoin for its lower risk and better returns, especially in the current cycle. He admits his own bias is due to previous profitable trades from Ethereum to Bitcoin, highlighting his concern that Ethereum continues to underperform against Bitcoin.
Net Liquidity and Ethereum
Cowen then goes deeper into the relationship between Ethereum’s performance against Bitcoin and global monetary policy, particularly net liquidity. Ethereum’s value relative to Bitcoin has previously bottomed out in alignment with shifts in monetary policy, such as interest rate cuts and transitions from quantitative tightening to easing.
This correlation suggests that Ethereum’s performance against Bitcoin could be influenced by broader economic factors. Cowen advises caution in trying to anticipate these shifts, reflecting on the unpredictability of central bank actions and their impact on asset values.
Where Is ETH In the Cycle?
Cowen takes a deep dive into where Ethereum stands in its market cycle, comparing it to Bitcoin’s past rallies. He points out that Ethereum’s performance isn’t set in stone; it sways with the broader economy, including changes in interest rates and whether the financial world is loosening or tightening the purse strings.
He zeros in on how the overall flow of money in the economy, or net liquidity, can affect how investments do. Cowen hints that in some economic conditions, riskier bets like Ethereum could start to shine brighter than their safer counterparts.
However, he remains cautious, keeping his portfolio Bitcoin-heavy due to its dominance and his scepticism about Ethereum’s immediate prospects.
My bias is that dominance will continue to climb. That doesn’t mean it can’t have pullbacks.
Ben Cowen
Source:
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