Ethereum Merge uncertainty pushes $1B Fund to "safer assets"

Asset management firm Valkyrie turning to safety assets like Bitcoin (BTC) “until we see The Merge goes through”.

Investors holding large amounts of funds are moving their capital away from Ethereum’s until The Merge will prove the relative security of the network, as is the case of asset management firm Valkyrie Investments.

Discussing how macro-trends are affecting the crypto markets, the implications of the Ethereum Merge, where Valkyrie sees opportunities in this environment, and his read on institutional sentiment Valkyrie Chief Investment Officer Steven McClurg told Bloomberg Technology: “I don’t necessarily think a move to proof-of-stake is a great thing for Ethereum in the short run. In the long run, it might actually work out.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, essentially, you have computers or validators that are validating transactions all over the world in a decentralized manner. When you move to proof-of-stake, that really falls in the hands of a few,” he pointed out.

“In terms of how Ethereum goes, the security will need to be seen how that’s going to work out. Because we really think that if you’re holding a million-dollar-plus NFT and you’re relying on the Ethereum network and it’s changing right now, that may not be a great place to be right now,” the CIO also said.

McClurg also confirmed that Valkyrie, which recently topped about $1 billion in assets under its management (AUM), is moving its funds into less volatile and more secure assets to seek safe havens rather than take risks. “Right now Bitcoin and some of the more established proof-of-stake protocols such as Avalanche and Zilliqa are really the flight to safety for a lot of our funds. We’re really moving out of anything that has too much exposure to ETH right now until we see this merge goes through and into some of the safer larger crypto protocols,” he concluded.