On July 16, Tetras Capital released a “bearish thesis” on the future of Ethereum (ETH). In their 41-page report, the New York City-based hedge fund management company suggested that ETH is still significantly overvalued. The bulls see a much different direction for the cryptocurrency. Jake Brukhman, the founder of another New York asset management company that specializes in digital assets, CoinFund, disagrees, as do many other pro-crypto bulls. So who’s right?

Ethereum is the second largest cryptocurrency in the world according to CoinMarketCap, with a market cap of $48 billion, compared to $141 billion for Bitcoin. The next crypto on the list is Ripple, with a market cap of $18 billion, less than half that of Ethereum.

Tetras is betting heavily against Ether. According to Forbes, the company began shorting the cryptocurrency in May 2018 when the price was hovering around $600. For the past month, Ether has been relatively stable, with resistance at $500.

Forbes estimates that Tetras has $30 million in assets under management. According to founding partner, Alex Sunnarborg, the hedge fund has two high-conviction positions: its Ether short, and its Bitcoin investment.

Tetras isn’t the only fund that’s shorting Ether. According to Forbes, Timothy Young, the founder of Socialcast who sold the company for $100 million in 2011 is also shorting Ether through Hidden Hand Capital, his family office in San Francisco.

The problem that Tetras seems focused on is Ethereum’s relatively slow transaction speed. Though ETH is many times faster than its predecessor, BTC, the 15 transactions that it can handle per second pales in comparison to the 24,000 transactions that Visa can process. This speed is also very slow compared to later-generation coins like Stellar Lumens, Skycoin and Ripple. These high-transaction-speed cryptocurrencies can handle transaction volumes that make them viable as replacements for current banking systems. Ethereum has a long way to go to get to that level, with delays in its roadmap for the Casper and Sharding upgrades.

According to Michael K. Spencer, a tech futurist and editor of FutureSin, Ethereum may release both updates at once. Sharding will enable Ethereum to utilize sidechains, replacing the need for smart contracts. Casper could then be released as a shard, where Ethereum completes its transition to a proof-of-stake algorithm. With these changes, the coin will become more energy-efficient as the need for mining new coins is eliminated. More importantly from a utility perspective, sharding will allow Ethereum to scale exponentially, to the point where it will be able to process transactions at speeds that may surpass its competitors. Assuming this upgrade is successful, it will eliminate one of the primary pain points that Tetras claims will drive the value of Ethereum down.

The other main issue that Tetras calls out is the growing number of ICOs that are built on the Ethereum platform. Their concern is that regulatory crackdowns on these ICOs will have a direct impact on the price of Ethereum. The reality, however, is that most ICOs are not funded by the general public in the US, where regulations are expected to be the most impactful. And, while other platforms could be used for ICOs, and are arguably better, faster, and cheaper, Ethereum already has a base of developers, and ICO code that make go-to-market strategies faster and cheaper than they would be for those who choose a different platform.

Hedge fund manager’s opinions should not be ignored. They are the professionals. We base our layman’s opinion on the utility of the coin, its mass adoption and the direction and likelihood of future upgrades. We remain bullish.