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Key takeaways

  1. We will explain Ethereum’s business and financial model, lay out why we believe Ethereum is well positioned for future growth and describe why investing in ETH is a way to capture value created by the network.
  2. Ethereum’s robust financial and business model and significant historical growth have informed our view that its native token Ether (ETH) will continue to be an attractive asset to include in a modern portfolio.
  3. ETH is a meaningfully different investment from the traditional asset classes that investors typically have exposure to.

Read the full paper to explore:

  • Ethereum’s business and financial model
  • The investment case for owning ETH
  • Analysis of ETH’s historical performance

Ethereum is a general-purpose blockchain. Its programming language, along with the introduction of self-executing smart contracts, allows for more complex “if-then” activities. This innovation transformed blockchains from mere distributed ledgers into powerful, global virtual computers, enabling the creation of comprehensive applications across various domains securely and autonomously, from marketplaces and financial tools to social networks and even other blockchains. Ethereum, in effect, became the “Android of the cryptocurrency world,” with tens of thousands of developers using Ethereum’s programming language and developer toolkit to build applications and transact via Ethereum’s network.

Holding Ethereum’s native token—Ether (ETH)—signifies more than transactional utility; it represents an ownership stake in Ethereum’s network, offering both participatory and economic benefits aligned with the ecosystem’s growth. In this article, we will explain Ethereum’s business and financial model, lay out why we believe Ethereum is well positioned for future growth and describe why investing in ETH is a way to capture value created by the network. We will also review the historical performance of ETH.

WHAT ARE THE RISKS?

All investments involve risks, including possible loss of principal.

Blockchain and cryptocurrency investments are subject to various risks, including inability to develop digital asset applications or to capitalize on those applications, theft, loss, or destruction of cryptographic keys, the possibility that digital asset technologies may never be fully implemented, cybersecurity risk, conflicting intellectual property claims, and inconsistent and changing regulations. Speculative trading in bitcoins and other forms of cryptocurrencies, many of which have exhibited extreme price volatility, carries significant risk; an investor can lose the entire amount of their investment. Blockchain technology is a new and relatively untested technology and may never be implemented to a scale that provides identifiable benefits. If a cryptocurrency is deemed a security, it may be deemed to violate federal securities laws. There may be a limited or no secondary market for cryptocurrencies.

Digital assets are subject to risks relating to immature and rapidly developing technology, security vulnerabilities of this technology, (such as theft, loss, or destruction of cryptographic keys), conflicting intellectual property claims, credit risk of digital asset exchanges, regulatory uncertainty, high volatility in their value/price, unclear acceptance by users and global marketplaces, and manipulation or fraud. Portfolio managers, service providers to the portfolios and other market participants increasingly depend on complex information technology and communications systems to conduct business functions. These systems are subject to a number of different threats or risks that could adversely affect the portfolio and their investors, despite the efforts of the portfolio managers and service providers to adopt technologies, processes and practices intended to mitigate these risks and protect the security of their computer systems, software, networks and other technology assets, as well as the confidentiality, integrity and availability of information belonging to the portfolios and their investors.

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