$1,000,000,000 Crypto Fund Jumping Into Bitcoin And Two Ethereum Competitors As Big Risk Emerges, CIO Says
Valkyrie Investments’ chief investment officer says the crypto asset manager is turning to flight-to-safety assets like Bitcoin (BTC) as The Merge draws closer.
In a new interview with Bloomberg Technology, Valkyrie’s CIO Steve McClurg says Ethereum (ETH) is preparing to transition to a Proof-of-Stake consensus mechanism in September and the crypto asset manager is exiting all of its positions in the second largest digital company gives up plant.
According to McClurg, Valkyrie, which has about $1 billion in assets under management, is moving its funds to Bitcoin and other smart contract blockchains like Avalanche (AVAX) and Zilliqa (ZIL).
“Right now, for a lot of our funds, bitcoin is really the escape to safety…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 pulling out of anything that has too much contact with ETH at the moment until we eventually see this merger [the] center [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 major risks for investors.
“I don’t necessarily think a move to proof-of-stake is a great thing for Ethereum in the short term. It might actually work in the long run.
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 around the world in a decentralized manner. When you move to proof-of-stake, that really falls into the hands of a few.”
The CIO also says that after The Merge, Ethereum’s security will need to prove itself before investors holding large amounts of money on the network can feel safe.
“But in relation to [how] Ethereum going, security needs to be seen how this is going to work. Because we really believe that if you hold over a million dollars worth of NFT and you’re relying on the Ethereum network and it’s changing right now, that might not be a great place to be right now.”
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