In a recent interview, Cameron Winklevoss, Co-Founder and President of crypto exchange Gemini, told journalist Layah Heilpern that he felt that Ether (ETH) was “really undervalued.”

His comments during an interview last Thursday, at a time when Ether was trading around $1600:

It’s really hard to put a ceiling or a framework on creativity, and what that means. So, how do you value that?… today it’s $1600, but the all-time high was breached a day or two ago, and that was reached three years ago, and the amount of work that’s gone on, and the development in the maturity of the network in the past three years, you’re looking at Ethereum basically at its all-time high, it feels really undervalued where it currently is. Bitcoin is close to twice its all-time high of three years ago. So, we think there’s a lot of value there and love the endless possibilities and nature of it.

As for dentralized finance (DeFi), he had this to say:

We’re definitely pro DeFi. We’ve listed dozens of DeFi tokens on Gemini. We’re really very supportive. It’s early days, right, and it’s in the process of sort of building the building blocks within money legos and putting themselves together and re-architecting centralized finance.

There’s risk. It’s not the most user-friendly experience. There’s definitely risk. Some projects will fail spectacularly, and some of them will be incredibly successful. It’s new, and that has to be sort of the lens at which you approach it.

Last month, Joey Krug, Co-Chief Investment Officer at blockchain-focused investment firm Pantera Capital Management LP, explained in his firm’s most recent monthly newsletter why Ethereum (ETH) is undervalued.

In the January 2021 issue of Pantera Blockchain Letter, which was published on Thursday (January 14), Krug started by giving an introduction to Ethereum and its ecosystem:

Ethereum is the leading asset in the cryptocurrency space for developers who want to write smart contracts and decentralized finance (DeFi) applications. It’s the base money collateral for this new financial system. …

With Ethereum, anyone can participate in or even create a new financial market in a few clicks. You can take out a loan at 3am on a Saturday night if you want, and pay it back the following Sunday. Instead of needing an exchange or OTC desk, you can swap from one asset to another using sites like 1inch and Matcha, and often get a better price. And you can send someone digital dollars 24x7x365 in 30 to 60 seconds, and they actually receive it in that timeframe too…

… now we’re in the era of Ethereum actually being very useful and having found product market fit for people within crypto (2019–21). Over the course of this year, I believe this growth will continue and Ethereum will provide even more value for crypto users as a platform for decentralized exchanges (DEX’s), lending protocols, synthetic asset trading protocols, etc…

As for today’s price action, according to data by TradingView, at 8:20 UTC, the Ether price went above $1800 for the first time ever and by 09:13 UTC, it reached $1824, which is today’s intraday high.

It is also worth mentioning that yeterday (February 8) was the first day of trading for CME Group’s Ether futures.

Another important event — as far as Ethereum and DeFi is concerned — that took place yesterday was the release of a paper on DeFi by the Research Division of the Federal Reserve Bank of St. Louis.

This was the conclusion of their findings:

DeFi offers exciting opportunities and has the potential to create a truly open, transparent, and immutable financial infrastructure. Because DeFi consists of numerous highly interoperable protocols and applications, every individual can verify all transactions and data is readily available for users and researchers to analyze.

DeFi has unleashed a wave of innovation. On the one hand, developers are using smart contracts and the decentralized settlement layer to create trustless versions of traditional financial instruments. On the other hand, they are creating entirely new financial instruments that could not be realized without the underlying public blockchain. Atomic swaps, autonomous liquidity pools, decentralized stablecoins, and flash loans are just a few of many examples that show the great potential of this ecosystem.

While this technology has great potential, there are certain risks involved. Smart contracts can have security issues that may allow for unintended usage, and scalability issues limit the number of users. Moreover, the term “decentralized” is deceptive in some cases. Many protocols and applications use external data sources and special admin keys to manage the system, conduct smart contract upgrades, or even perform emergency shutdowns. While this does not necessarily constitute a problem, users should be aware that, in many cases, there is much trust involved. However, if these issues can be solved, DeFi may lead to a paradigm shift in the financial industry and potentially contribute toward a more robust, open, and transparent financial infrastructure.

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The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.