‘We’re very concerned for different reasons when it comes to Bitcoin’: ERShares COO

Eva Ados, ERShares COO, joins Yahoo Finance to discuss the outlook on cryptocurrency, the tech sector, and inflation concerns.

Video Transcript

- All right, let's bring in Eva Ados now. She's COO of ERShares. And Eva, let's just stick with the cryptocurrency theme here for a moment. Do you guys have any exposure there? And if so, where?

EVA ADOS: No, we definitely don't. The biggest reason is the ESG concerns we have. So as an investor in entrepreneurial stocks with an ESG layer, we would never get into Bitcoin, for environmental, social, and governance concerns. In addition to the criminal activity that we have seen online, we're also concerned with the recent extortions that we saw-- not only with a US oil pipeline, but also in Ireland with their health care IT system.

And horrible scenarios can happen if we have more ransomware attacks like these. The cybersecurity concerns are a lot. 7,000-plus people have lost-- have been victims of loss since October. That's 1,000% bigger than last year. And right now, crypto mining malware is the biggest. It has replaced spyware as the most common malware out there, so we're very concerned with different-- for different reasons when it comes to Bitcoin.

- Yeah. Just yesterday, Eva, we were actually chatting about how there's so many cryptocurrency scammers out there that have bilked folks of millions of dollars. Let's pivot now then. We got some inflation data out today-- curious to know if you view that acceleration in inflation as transitory, much like the Fed does. And what kind of risk do you think inflation is going to present to equities going forward?

EVA ADOS: Just like the Fed, we also believe it's transitory, as the economy's opening up and there's a lot of pent-up demand. But that being said, we are monitoring different factors-- for example, food prices. And food prices have increased to 2.2% as of April on a year-over-year basis. But if you look at corn, which is an input product in many different products, that has increased by 30% year to date.

Many people don't realize it, but only 10% of it is used for direct consumption. The rest is used for cosmetics, construction, even for ethanol that goes into fuel. So it's not just corn tortillas. And for that reason, we are monitoring food prices, wages that can create a demand pull inflation, and the increased spending that now, with the 37% increase in the debt, we're very concerned that the Fed will at some point start tapering and tightening monetary policy, and that will push interest rates higher.

- What happens when the Fed inevitably does have to take its foot off the pedal here, and we're going to see rates rise, we're going to see them taper that bond buying activity? What stocks do you think or what sectors do you think are going to do the best? Are we going to start seeing interest again in tech stocks?

EVA ADOS: We believe that we will see some volatility regardless, because the market is very vulnerable now to any-- even a 10 [INAUDIBLE] change in the 10-year. So for that reason, we will see some volatility. But that being said, we do not believe that that should be affected in a negative way, because if you think about it, their margins are so high, and that allows them to not only eat costs associated with price increases but also to pass along costs, because in some cases, they have inelastic demand, they have very high margins, and they can pass a lower costs to the customers.

In addition to that, the way we evaluate growth stocks is based on the growth itself. And that's, for us, the biggest unknown. Nothing has changed when it comes to their growth. In fact, some of the tech stocks right now are priced very attractively, and for that reason, we have seen a lot of money now flowing into tech stocks again.

- All right. Eva Ados, COO of ERShares, good to see you. Thanks for being with us.