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NYU’s ‘dean of valuation’ argues ether has a better chance of becoming a commodity than bitcoin

The cryptocurrency ether “has a better shot” at becoming a commodity than bitcoin, argues New York University’s Aswath Damodaran.

“If the future lies in blockchain transactions — and ether is going to be a better lubricant of those blockchain transactions — you could actually argue that ether has a stronger upside story than bitcoin does,” Damodaran, a professor of finance at NYU’s Stern School of Business, told CNBC’s “Street Signs Asia” on Thursday.

Ether is the cryptocurrency that runs on the Ethereum blockchain. It currently sits in second place behind bitcoin in terms of market cap, according to Coinmarketcap. Noted proponents of Ethereum include billionaire investor Mark Cuban, who told CNBC previously that it “dwarfs” bitcoin.

Damodaran, a longtime skeptic of the cryptocurrency, said bitcoin lacks an “endgame” and called it a “purely speculative game.”

“All that bitcoin bulls seem to talk about, their biggest sales pitch for bitcoin is: ‘Look at how much money I’ve made on bitcoin.’ That’s it, that’s the end of the sales pitch,” he said. “That’s not a sales pitch. That tells me nothing about the substance here.”

“I wouldn’t be surprised if bitcoin is up 20% tomorrow, down 25% the day after. This has become a purely speculative game,” said Damodaran, who is also known as Wall Street’s “dean of valuation.”

The professor’s comments came after a collapse in cryptocurrency prices Wednesday stateside.

Bitcoin plummeted 30% to about $30,000 at one point, but has since recovered partially and was trading at $40,110.38 as of 3:51 a.m. ET Thursday, according to Coin Metrics. Ether was not spared in the fallout, briefly falling below $2,000 before later making a partial recovery. It last traded at $2,724.61.

That wild ride was likely triggered by a slew of negative headlines and catalysts, such as tweets by Tesla CEO Elon Musk as well as regulation by the Chinese government.

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