Ether, the second largest cryptocurrency by market value after bitcoin, hit a record high on Wednesday – but despite its rally, “it’s always going to be No. 2” next to bitcoin, investor Kevin O’Leary tells CNBC Make It.
“I just believe that to be the case. Bitcoin will always be the ‘gold.’ Ethereum will always be the ‘silver.” And “that’s not a bad thing necessarily,” says O’Leary, who is chairman of O’Shares ETFs. (Ethereum is the blockchain that powers cryptocurrency ether.)
As O’Leary mentions, bulls view bitcoin as digital gold and a hedge against inflation that will appreciate over time.
In March, O’Leary announced that he allocated 3% of his portfolio to bitcoin, though he has owned the cryptocurrency, along with ether and a few other digital coins, since 2017. He made this move after Canada and a few other countries’ regulators eased restrictions on institutional buying of the cryptocurrency, he says.
“Now, bitcoin hitting new highs almost every week is proving that there are interests being brought out of all kinds of institutions now trying to figure out: Is it a currency? Is it an asset? Is a property?” O’Leary says. “… That gives you an idea of the institutional and individual interest.” (While bitcoin has continued to hit new highs, the cryptocurrency is volatile, so it also can plunge to lows rather quickly.)
In O’Leary’s opinion, Ethereum is just “going to be used as a form of tracking and payment system.”