Michael Bodley

Old Street Digital, a London crypto asset manager that has quietly assembled a team chock full of deeply credentialed investment veterans, has hit a snag: raising the kind of institutional capital its traders are used to trading.&nbsp;



Old Street Digital (OSD) has less than $10 million of assets under management — a drop in the financial bucket from what OSD Chief Investment Officer Gary Clarke handled at <a href="https://blockworks.co/tag/blackrock" target="_blank" rel="noreferrer noopener">BlackRock</a>, where he headed up the traditional finance giant’s global equity team.&nbsp;



From 2014 to 2016, according to Clarke’s LinkedIn, he oversaw a team of US and United Kingdom portfolio managers running more than $30 billion at BlackRock — otherwise known as the world’s largest asset manager.&nbsp;



Old Street has been pushing to raise the kind of external money its team is accustomed to, according to two sources familiar with the matter, confidential firm marketing materials obtained by Blockworks and United Kingdom FCA regulatory records.&nbsp;



Read more: <a href="https://blockworks.co/news/uk-tougher-on-crypto-companies">UK Denies Crypto Companies the US Lets Operate</a>



Even as digital asset markets have stabilized and bounced back from near historic lows in the fourth quarter of 2022, that effort evidently hasn’t been easy.&nbsp;



The firm’s latest pivot: recently tapping perFORM Due Diligence of London to conduct a review of its operations and trading functions. Run by Quentin Thom and James Newman, perFORM, started out as a traditional finance due diligence firm. But it’s since expanded into conducting reviews of crypto service providers and funds.&nbsp;&nbsp;



In an exclusive interview with Blockworks, Old Street Chief Executive Officer Paul Ridley said the crypto industry is “still in the super early days” when it comes to the level of limited partner dry powder that has fueled the rise of traditional finance fund managers for decades.&nbsp;



The core team Ridley works with at Old Street are all used to trading or overseeing the back and middle-office operations of a slew of strategies deploying north of $1 billion, Ridley said. The Old Street head’s resume includes stints at investment bank Nomura and Boston Consulting Group, and he has personal experience in the crypto sector.&nbsp;



And Chief Operating Officer Nic Basson joined the firm after spending nearly four years at alternatives giant Invesco, where he worked in senior roles focusing on emerging markets, including retail products, according to his LinkedIn.&nbsp;&nbsp;



“We’ve all had to adjust our definition of small,” Ridley told Blockworks.&nbsp;



He declined to comment on investor communications and the marketing materials obtained by Blockworks, citing regulatory restrictions in the United Kingdom.



<h2 class="wp-block-heading">Top backers, not top capital&nbsp;</h2>



Old Street, named for the historic mile stretch of London that has been a hotbed of hedge fund traders and their courting service providers for as long as anyone in the city’s traditional finance scene can remember, has no shortage of brand name backers behind it.&nbsp;



It’s the kind of firm that doesn’t need publicity and doesn’t seek it out. It’s the kind of firm that shouldn’t have this tough of a time raising serious dollars and pounds from pension advisors, top family offices and endowments.



Ten million dollars under management these days is no small sum for upstart crypto funds looking to take on the industry’s deep rooted native players — the likes of Pantera Capital and maybe even Grayscale Investments or Galaxy Digital one day.&nbsp;



Ridley’s team locked down a $2.8 million seed round in August 2022 led by Draper Associates, according to a <a href="https://www.prnewswire.co.uk/news-releases/old-street-digital-announces-2-8m-seed-funding-round-led-by-draper-associates-876490141.html" target="_blank" rel="noreferrer noopener">statement</a> from the time. It included participating investors like Plassa Capital, plus “prominent venture capital and angel investors across Europe, Asia and the U.S. as well as senior executives from the U.K. Asset Management industry,” the statement said.



Tim Draper, the near household name venture capitalist who founded Draper Associates, then said in the statement that Old Street’s team brought a “unique approach” that “applies traditional fund-management expertise to the world of crypto.”



That approach has yet to fully mesh, at least when measured by outside limited partner capital raised so far. But Ridley told Blockworks he and his team are playing the long game in an industry that has been beset by a lack of traditional finance understanding and regulatory hurdle after hurdle.&nbsp;



“What we wanted to do was take a bunch of traditional finance asset management [types], bring them together and try to build a really reputational product that would be the sort of thing that BlackRock would build, that T Rowe [Price] would build,” he said. “The kind of really clear, focused product which is the kind of thing institutions should be buying — pension funds, endowments, sovereign wealth funds.”



Asked the difference between an institutional investor in traditional finance and an institutional investor in digital assets, Ridley said that his London financial circle “have been talking about exactly that” on and off in 2023.



“No one knows what a real institutional investor is in this space — still,” he said.&nbsp;



<h2 class="wp-block-heading">Stablecoin yield for TradFi types</h2>



That said, the team has operational capital from its $2.8 million seed round, and Ridley is projecting patience in terms of really getting things going.&nbsp;



One of Old Street’s core strategies, which it dubs in investor marketing materials as the “Old Street Digital Crypto Cash Management Solution,” had delivered a gross annualized return of 11.7% from its inception in the fourth quarter of 2022 through the end of February.&nbsp;



It targets an 8 to 15% annual return, per the same materials, by following a strategy that makes stablecoin investments across DeFi protocols. There’s monthly liquidity under the commingled structure, which the marketing materials say has had zero down months.&nbsp;



It’s intended to appeal to both traditional finance backers and crypto native investors looking for yield in the wake of Silicon Valley Bank (SBV) folding — as well as the likes of Signature Bank, two of the sources said.&nbsp;



It invests in “blue chip” pools of DeFi assets, engaging in collateralized lending, also known as yield farming, and it’s been marketed in a way that might appeal to credit investors with an appetite for risk beyond plain vanilla bonds. Old Street isn’t exactly going after the distressed debt TradFi crowd here, sources said.&nbsp;



The marketing materials list a number of US stablecoins, including <a href="https://blockworks.co/price/usdt" target="_blank" rel="noreferrer noopener">USDT</a>, <a href="https://blockworks.co/price/usdc" target="_blank" rel="noreferrer noopener">USDC</a>, <a href="https://blockworks.co/price/busd" target="_blank" rel="noreferrer noopener">BUSD</a>, <a href="https://blockworks.co/price/dai" target="_blank" rel="noreferrer noopener">DAI</a>, <a href="https://blockworks.co/price/fxs" target="_blank" rel="noreferrer noopener">FRAX</a>, <a href="https://blockworks.co/price/tusd" target="_blank" rel="noreferrer noopener">TUSD</a>, <a href="https://blockworks.co/price/usdp" target="_blank" rel="noreferrer noopener">USDP</a>, <a href="https://blockworks.co/price/usdd" target="_blank" rel="noreferrer noopener">USDD</a> and <a href="https://blockworks.co/price/gusd" target="_blank" rel="noreferrer noopener">GUSD</a>.&nbsp;



It’s intended to be the safe play that limited partners with billions of dollars at their disposal ought to be able to grasp: low volatility, at least so far, coupled with the inherent transparency of blockchain technology. The crypto cash play doesn’t take directional bets and prominently states in its marketing materials that it has “zero exposure to Bitcoin, etc.”&nbsp;



And it’s being shopped around to investors as combining quantitative elements with fundamental research — the kind of “quantamental” language that Wall Street types ought to be able to grasp, might be able to get behind.&nbsp;



It holds assets held by Old Street on-chain, which the firm says results in “access to opportunities not possible off-chain.”&nbsp;



Crypto custodian Fireblocks, as well as the FCA-regulated TrustVault, have been put in place as counterparties on Old Street’s multi-signature solution to safekeeping client cryptoassets, according to the materials.&nbsp;



<h2 class="wp-block-heading">The crypto long haul</h2>



The collapse of FTX and the crypto meltdown that marked the end of last year didn’t help the grand capital raising aspirations of Old Street and its competitors.&nbsp;



Macro conditions and regulatory concerns aside, though, Ridley said that the disconnect between household crypto names and household finance names is still frustrating, at least at times, across the board.



In describing Clarke’s credentials, Ridley said he was “pretty much at the top of the profession…in the equities world” when he was running $30 or so billion at BlackRock.



Clarke is 54 and is a “fund management nerd first, but he’s alternative enough to have a cool haircut, and spend his time thinking about tokens now,” the Old Street chief executive said.&nbsp;



“I always argue that he’s a bigger name than [Mike Novogratz, the founder of Galaxy Digital] is,” Clarke said. “It’s just that no one gives a shit about equities. And we’ll stand on a stage and yell and scream and sweat or whatever, right…To make a long story short, we&#8217;re trying to approach crypto in a different way that we think is going to be much more attractive to be the biggest kind of investors out there. Despite everything that&#8217;s going on in the crypto market and whatever.”



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Former BlackRock Global Equities Head Running Crypto Fund

Macauley Peterson

<div id="highlights-block_6241d462f69f9" class="highlights">
 <ul>
 <li>Wright’s claim to be Satoshi Nakamoto was not at issue in this case</li>
 <li>The judge ruled that developers have no fiduciary duty to bitcoin owners</li>
 </ul>
 
</div>



Craig Wright, who claims to be Bitcoin creator Satoshi Nakamoto, suffered a new legal setback as a London court <a href="https://www.bailii.org/cgi-bin/format.cgi?doc=/ew/cases/EWHC/Ch/2022/667.html" target="_blank" rel="noreferrer noopener">ruled</a> developers have no fiduciary responsibility to aid the Australian computer scientist in accessing two wallets containing about $3.9 billion in bitcoins. 



Wright, whose company Tulip Trading Limited (TTL) brought the litigation, said he lost his private keys following a hack, and wants Bitcoin developers to assist him in regaining control of the assets. Judge Sarah Falk of the London High Court turned down that notion Friday.&nbsp;



The 16 defendants are all developers of Bitcoin-related software, and 12 are Bitcoin Core developers, the chain widely regarded as the canonical Bitcoin, or BTC.&nbsp; Wright’s company also laid claim against developers of several forks: Bitcoin Cash, Bitcoin ABC and Bitcoin SV (the fork that Wright himself says is “Satoshi’s Vision”.)



Wright maintains the two Bitcoin wallet addresses are his, via a series of Seychellois and Antiguan shell companies and trusts for which he and his wife Ramona Ang are beneficial owners.



Wright contends he stored the private keys in a password-protected file, with backups on two cloud storage servers, but that both the file and its backups were removed or deleted in a hack prior to Feb. 8, 2020.



The assets have not moved since the time of the alleged hack. Wright wants Bitcoin developers to push through a software update that would restore his access to the wallets. In fact, he offered to pay them to do so.



<blockquote class="wp-block-quote">“Apart from their shared interest in digital assets, there is very little common ground between the Claimant and the Defendants,” Judge Falk wrote, adding “a significant level of animosity exists which is much broader than, and the origins of which pre-date, the particular dispute before this court.”</blockquote>



For instance, the judge wrote, Wright’s claim that Bitcoin developers have the power to do what he asks is disputed.



The defendants point that Bitcoin development occurs among “a very large, and shifting, group of contributors without an organisation or structure,” and that even if they could alter the network software, miners and full node operators would just ignore such a change, as it goes against the community’s core values. At most, it would lead to further network forks, but not actually allow Wright to access the value locked in the bitcoins he seeks.



The extent of Bitcoin developers’ actual power bears directly on the key question in the case — whether the role and work of the Bitcoin developers itself creates a fiduciary duty to TTL, assuming Wright was in fact the victim of a fraudulent hack (which the developers also dispute).



“It is very hard to see how TTL&#8217;s case on fiduciary duty is seriously arguable,” Judge Falk wrote.



<blockquote class="wp-block-quote">“I do not think that bitcoin owners can realistically be described as entrusting their property to a fluctuating, and unidentified, body of developers of the software, at least in the sense and to the extent claimed by TTL.”</blockquote>



Even assuming TTL could establish the facts that it relies on in the course of a trial, the judge explained, there was no realistic prospect of establishing a breach of fiduciary duty owed by the developers to TTL.



Although the relationship between developers and bitcoin owners “generally has a fiduciary quality”, the judge wrote, their duty is not to any particular owner, to the detriment of others.



<blockquote class="wp-block-quote">“It is uncontroversial that a fundamental feature of the Networks, at least in their existing form, is that digital assets are transferred through the use of private keys. TTL effectively seeks to bypass that.”</blockquote>



The judge was not persuaded by TTL’s claim that Bitcoin developers owed a “duty of care” that was breached by allowing the network to operate in such a way that the private keys could be lost in the first place. Such a claim, she wrote, was not “realistically arguable.” They would have to have some contractual relationship with Wright or his companies. Otherwise, she noted, “by definition the potential class in this case is unknown and potentially unlimited.”



In other words, it would be ludicrous to open up bitcoin developers to legal jeopardy from anyone whose private keys were ever lost or stolen. The fact that TTL would pay them to try to gain access to the wallets further “underlines the weakness of its case,” Falk wrote.



Last December, following a trial in Florida, Wright <a href="https://cms.blockworks.co/verdict-in-craig-wright-civil-trial-100m-award-for-plaintiff-but-no-punitive-damages/" target="_blank" rel="noreferrer noopener">was found liable</a> for conversion — a form of theft — and ordered to pay $100 million to a company controlled by Ira Kleiman, the brother of Wrights’ former business partner, David Kleiman, with whom Wright once mined bitcoins.



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Bitcoin Developers Do Not Have a Fiduciary Duty to Bitcoin Owners, Judge Rules

Sam Reynolds

<div id="highlights-block_61141400766ad" class="highlights">
 <ul>
 <li>Post activation of EIP-1559, nearly 30,000 ether have already been burned </li>
 <li>Because the volume of ether being burned, the money supply of ether briefly dipped into a deflationary state</li>
 </ul>
 
</div>



The burn mechanism to control the money supply of ether has been in full force since the implementation of EIP-1559 with nearly 30,000 ether being burnt according to a tracker from <a href="https://ultrasound.money/" target="_blank" rel="noreferrer noopener">ultrasound.money</a>.&nbsp;



As part of <a href="https://cms.blockworks.co/eip-1559-is-live-thanks-to-ethereums-london-hard-fork/" target="_blank" rel="noreferrer noopener">EIP-1559</a>, activated last week as part of the London Hard Fork, transaction fees that once went to miners are now destroyed through the issuance of burn blocks.



<figure class="wp-block-image size-large"><img decoding="async" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/08/ultrasound-money-fee-burn-1024x394-1.jpg" alt="" class="wp-image-6439"/></figure>



When the amount of ether burned exceeds the issuance, the Ethereum blockchain enters a deflationary cycle through the issuance of deflationary blocks.



On Tuesday, a tracker called ETH Burn Bot on Twitter showed that the annualized issuance of ether hit negative territory thanks to burns coming in at -3%.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">945.1184 <a href="https://twitter.com/search?q=%24ETH&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$ETH</a> burned 🔥🔥🔥 last hour. Issuance: 528.0000 ETH Net Change: -417.1184 ETH Annualized: -3.12% 📉 2021-08-10 22:00-23:00 UTC Last Block: 13000300 Cumulative 🔥: 24,942.1282 ETH&mdash; ETH Burn 🔥 Bot 🦇🔊 (@ethburnbot) <a href="https://twitter.com/ethburnbot/status/1425230784164556803?ref_src=twsrc%5Etfw">August 10, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



According to ETH Burn Bot, annualized issuance is now between 1.6-2.5%. Prior to the implementation of EIP-1559, the money supply of ether has grown at 8.15% according to <a href="https://ycharts.com/indicators/ethereum_supply" target="_blank" rel="noreferrer noopener">YCharts</a>.



While ether’s move into deflation was only a temporary tip, it is expected to become a permanent fixture when the Ethereum blockchain moves to a proof-of-stake system as part of the <a href="https://cms.blockworks.co/institutions-staking-eth-2-want-internet-bonds/" target="_blank" rel="noreferrer noopener">ETH 2.0 transition</a> in 2022.&nbsp;&nbsp;&nbsp;



But while the the reduction in money supply of ether is great for HODLers, and fulfills a promise from the London hard fork, the recent spike of activity on the ethereum blockchain has driven up the cost of gas prices for transactions.



Data from Dune Analytics shows that the average price of the gas for a transaction hit $20, before normalizing back to around the sub-$1 mark Wednesday. <a href="https://ycharts.com/indicators/ethereum_average_gas_price" target="_blank" rel="noreferrer noopener">Despite this spike</a>, gas prices are still down 44% from a year ago.&nbsp; Ethereum is currently trading at $3,200, according to CoinGecko, up <a href="https://www.coingecko.com/en/coins/ethereum" target="_blank" rel="noreferrer noopener">4.5% on-day</a>.



Want more investor-focused content on digital assets?&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Join us</a>&nbsp;September 13th and 14th for the Digital Asset Summit (DAS) in NYC. Use code ARTICLE for $75 off your ticket.&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Buy it now</a>.

Ether Burns Hit $100 Million Post EIP-1559 Activation

<div id="highlights-block_6108669022194" class="highlights">
 <ul>
 <li>EIP-1559 introduces ‘rent control’ on gas fees, and periodic token burning to limit the available supply of ether creating pricing pressure </li>
 <li>While there is a lingering threat of disillusionment from miners and app developers should the upgrade fail to deliver promised improvements, all metrics show its full steam ahead</li>
 </ul>
 
</div>



This week the Ethereum blockchain is set to undergo a significant transformation or “hard fork” as it’s called in the open source world.



In software parlance, a hard fork is a split in the underlying base code of the software that takes it a different direction than before. Common in the blockchain and Web3.0 world, a hard fork allows groups with a different vision to take software in a different direction from the founders’ vision. In the Ethereum world, nodes on the blockchain get to vote on whether to approve the fork.



The London hard fork (a.k.a. EIP-1559) upgrade set for Aug. 4 not only promises something akin to rent control for Ethereum’s notoriously high gas fees, but it will also limit the supply of ether tokens which should create pricing pressure.&nbsp;



Pricing pressure is pushing some researchers to predict an increase in ether pricing — anywhere from $5,000 to $10,000.



<h3 class="wp-block-heading">Progress so far</h3>



So far, the much-anticipated <a href="https://cms.blockworks.co/ethereum-whales-gobble-70-of-eth/" target="_blank" rel="noreferrer noopener">EIP-1559 upgrade</a> as part of the ‘London’ hard fork appears to be going smoothly and options data shows investors are anticipating pricing gains to kick in as early as the fall.&nbsp;



According to pricing data aggregated from <a href="https://www.deribit.com/" target="_blank" rel="noreferrer noopener">Derebit</a>, a significant amount of support via open interest if forming for options calls with a strike price of $5,000 with a contract expiry of December 31. Support is also rising around the $8,000-$10,000 mark as well.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="420" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/08/dec-31-2021-ether-strike-prices-1024x420.png" alt="Dec 31, 2020, ETH strike prices" class="wp-image-6099" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/08/dec-31-2021-ether-strike-prices-1024x420.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/dec-31-2021-ether-strike-prices-1024x420.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/dec-31-2021-ether-strike-prices-1024x420.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/dec-31-2021-ether-strike-prices-1024x420.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/dec-31-2021-ether-strike-prices-1024x420.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/dec-31-2021-ether-strike-prices-1024x420.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/dec-31-2021-ether-strike-prices-1024x420.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/dec-31-2021-ether-strike-prices-1024x420.png?w=1171 1171w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



For contracts that expire on September 24, significant support between the $3,200 and $5,000 mark also exists.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="425" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/08/sept-24-2021-ether-strike-prices-1024x425.png" alt="Sept. 24, 2021 ETH strike prices" class="wp-image-6100" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/08/sept-24-2021-ether-strike-prices-1024x425.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/sept-24-2021-ether-strike-prices-1024x425.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/sept-24-2021-ether-strike-prices-1024x425.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/sept-24-2021-ether-strike-prices-1024x425.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/sept-24-2021-ether-strike-prices-1024x425.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/sept-24-2021-ether-strike-prices-1024x425.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/sept-24-2021-ether-strike-prices-1024x425.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/sept-24-2021-ether-strike-prices-1024x425.png?w=1175 1175w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



As demand on the Ethereum blockchain has rapidly increased due to the success of decentralized finance (DeFi), the blockchain itself has become strained.&nbsp;



With this strain, gas fees have become astronomical; at times costing more than a wire transfer. Going forward, there will be much more price predictability within the market with gas fees quoted as a fixed versus moving price. In addition, a portion of these fees will be burnt or destroyed, thereby creating a mechanism of extra scarcity within the network putting upward pressure on price.&nbsp;



Jeff Prestes, a Senior Blockchain Engineer at Hermez Network, a layer 2 solution provider that allows for low-cost funds transfer via Ethereum says “everything is set” on their end for the fork.&nbsp;



Prestes told Blockworks that he’s looking forward to the transition over as it will mean that gas fees become cheaper and more predictable.



Even though EIP-1559 will significantly reduce the gas costs, they won’t be free, which is why <a href="https://hermez.io/" target="_blank" rel="noreferrer noopener">Hermez Network</a> — a gas-fee friendly payment protocol built on top of Ethereum (this is known as ‘layer 2 infrastructure) — and similar platforms will still have a use case because there will be continued demand to optimize transactions around network congestion so that users get the lowest possible gas fees.



<h3 class="wp-block-heading">The value of scarcity</h3>



While bitcoin is well known as ‘digital gold’, Lucas Outumuro, head of research at Into the Block, said that EIP-1559 will “fundamentally change” the way we value ether. In a Twitter thread, Outumuro argued that<a href="https://cms.blockworks.co/analyst-james-wang-ethereum-is-aws-in-2015/"> ether’s value</a> is more closely related to the volume of transaction activity which isn’t the case with bitcoin. And with this transaction activity, value is created through fee generation.&nbsp;&nbsp;&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">7/ One reason for BTC&#39;s relative premium is its fixed supply, potentially making it better suited as an asset to store value long-term than one with endless supply With EIP-1559, ETH is taking the first step towards reducing issuance, with supply projected to peak Feb 2022 <a href="https://t.co/yqNnLH7iSt">pic.twitter.com/yqNnLH7iSt</a>&mdash; Lucas Outumuro (@LucasOutumuro) <a href="https://twitter.com/LucasOutumuro/status/1422193754342055937?ref_src=twsrc%5Etfw">August 2, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



But, Outumuro noted, all this value-add through fee generation still leaves ether with 40% of the market cap of bitcoin — because of bitcoin’s inherent scarcity. Without the burn mechanism set to be introduced from EIP-1559, this is simply something that ether doesn’t have.&nbsp;&nbsp;



“One reason for BTC&#8217;s relative premium is its fixed supply, potentially making it better suited as an asset to store value long-term than one with endless supply With EIP-1559, ETH is taking the first step towards reducing issuance, with supply projected to peak Feb 2022,” he tweeted, adding that the on-chain activity thriving in NFTs, gaming, and DeFi makes it the store of value for the decentralized economy.



The London hard fork is set to be implemented on August 4 between 13:00 UTC and 17:00 UTC.&nbsp;



Currently, the price of ether is trading at $2,627.53, <a href="https://www.coingecko.com/en/coins/ethereum" target="_blank" rel="noreferrer noopener">according to CoinGecko</a>. 



Want more investor-focused content on digital assets?&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Join us</a>&nbsp;September 13th and 14th for the Digital Asset Summit (DAS) in NYC. Use code ARTICLE for $75 off your ticket.&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Buy it now</a>.