This year decentralized finance (DeFi) has proven to be a transformative sector for the cryptocurrency ecosystem and it is also making waves in among global financial markets as institutional investors become entranced with the potential to earn high yields on stablecoins, altcoins and Bitcoin.
While the price action from Dogecoin (DOGE) has dominated the headlines in recent weeks, Delphi Digital has been chronicling the growth of the DeFi ecosystem on the Ethereum (ETH) network which has steadily been gaining strength over the past month.
Ethereum DeFi performance year-to-date. Source:Delphi Digital
According to Delphi Digital researchers, while the majority of growth occurred on Ethereum-based DeFi platforms, protocols across the top ecosystems including Ethereum, BSC, Solana (SOL), Avalanche (AVAX), Polygon (MATIC) and Terra (LUNA) have begun to gain traction and now account for 34% of the total value locked in DeFi.
Multi-chain DeFi total value locked. Source:Delphi Digital
The BSC ecosystem is the second-fastest-growing DeFi ecosystem behind Ethereum, thanks in part to its connection with the Binance ecosystem which has immense resources to help get its native protocols off to a strong start.
Venus (XVS), PancakeSwap (CAKE) and PancakeBunny (BUNNY) are the three top DeFi protocols on the BSC and the total value locked on the network totals $49.1 billion.
Total value locked in DeFi on the BSC. Source:Defistation
Collectively, all layer-1 ecosystems have now surpassed $130 billion in cumulative total value locked (TVL).
Stablecoins form the foundation
According to Delphi Digital, DeFi native stablecoins have played a major role in the growth of the ecosystem and now account for nearly $10 billion of the total market cap.
Dai’s (DAI) circulating supply recently surpassed the $4 billion mark to establish itself as the largest DeFi stablecoin, while UST is a rapidly rising challenger fr the Terra ecosystem.
DeFi stablecoin market caps. Source:Delphi Digital
From a wider market perspective, the growing circulating supply of the top stablecoins projects (USDT and USDC) has further helped to boost the value of the crypto sector as a whole by providing a simple way for new funds to enter the market.
To highlight the significance of the growth in the cryptocurrency ecosystem, Delphi Digital points to the global M2 money supply, the broadest definition of the money supply.
Cryptocurrency percentage of total global money supply. Source:Delphi Digital
Due to gains made across the cryptocurrency ecosystem since mid-2020, the cumulative market cap of the crypto market is now more than 2% of the global M2 money supply with Bitcoin (BTC) alone accounting for 1%. Collectively, the rest of the crypto market accounts for about 1.2% of the global money supply.
As signs of increased cryptocurrency adoption arise on a near-daily basis, like the May 6 revelation that Goldman Sachs had launched a crypto trading desk, it’s likely that the amount of funds locked in DeFi will continue to rise alongside crypto’s share of the global money supply.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
As the headlines pile up about Bitcoin’s calamitous environmental impact, one group of investors and supporters have stepped up to the plate to defend the world’s largest digital asset with the help of a crowdfunded, FUD-fighting documentary film.
First announced by investor, podcast host, and Bitcoin fanatic Brad Mills on Twitter, the goal of the film is to act as a “definitive” argument for “why Bitcoin will transition the world to renewable energy faster than governments.”
I found the filmmaker (@jamie_jk) to make the definitive short film on why Bitcoin will transition the world to renewable energy faster than governments.
It will only cost $20-30k for a professional mini-doc on BTC energy FUD.
I will put up $5k in, who’s with us?#GreenBitcoin https://t.co/7MSPTUlArP
— Brad Mills ✍️ (@bradmillscan) May 14, 2021
Mills’ choice of director is Jamie King, best known for STEAL THIS FILM — a documentary series about BitTorrent and one of the earliest examples of a crowdfunded, free-to-share effort. In an interview with Cointelegraph, King said that the narrative about Bitcoin’s energy consumption pushed him into action.
“The idea for this new project, which we’re raising funds for right now, came about as a result of the increasing amount of attention being paid to Bitcoin’s energy usage,” King said. “Obviously this came to a head with Elon’s announcement about not accepting BTC for his cars for the time being — but it’s also a piece of ‘FUD’ we’re seeing repeated with greater and greater intensity.”
Earlier in the week, billionaire Elon Musk Tweeted that his company Tesla would no longer accept Bitcoin for payments — a comment that set off accusations of hypocrisy, but whose contents were echoed loudly in the mainstream media.
Despite Elon’s gripes, specifics about how much “dirty” energy Bitcoin consumes is difficult to calculate, however, and even estimates based off of Chinese consumption may only paint a rough picture.
Regardless, King and crew aren’t trying to argue that Bitcoin is clean, green tech.
“I think it’s important to acknowledge Bitcoin uses energy. A lot of it. That’s part of its design,” says King. “The question we need to ask is: is it worth it.”
To be clear, I strongly believe in crypto, but it can’t drive a massive increase in fossil fuel use, especially coal
— Elon Musk (@elonmusk) May 13, 2021
King said that those who instinctively answer “no” to that question likely haven’t done their research, and that “in a broader social, political and economic context” the case for Bitcoin’s energy consumption is self-evident.
So far the community has responded warmly, raising .5 BTC in just 48 hours. King also notes that while Bitcoin’s Lightning Network hasn’t seen the adoption some hoped for, after the project opened up to Lightning donations small backers began pouring in.
“I guess what we can see is that Lightning is very real for small Bitcoin donations, I’m glad to say,” he joked.
In the end, King’s goal isn’t to fling mud back at the FUD-sters, but instead to educate and elevate.
“I don’t just want to counter the idea that this is a ‘waste of energy’, but make something that inspires people about just what an amazing thing Bitcoin is. FUD-busting with a higher purpose!”
A widely-followed crypto strategist and trader is predicting a 100% rise in Cardano’s (ADA) price following the smart contract platform’s ascent to a new all-time high.
In a new tweet, the analyst known as Kaleo tells his 292,700 followers that he believes (ADA) is gearing up for a massive rally after topping its 2018 bull market high.
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“Tough to believeADAwon’t at least double from here. A clean break above the January 2018 all-time high earlier this month followed by accumulation above breakout. Only a matter of time before this starts sending again.”
Source: Kaleo/Twitter
Looking at the Bitcoin pair, Kaleo says ADA/BTC must take out a crucial resistance before it can ignite the next leg up.
“ADA/BTCExpecting resistance at 4,200 satoshis (0.000042). Break above that and it’s gone.”
Source: Kaleo/Twitter
Kaleo is bullish on a handful of altcoins as well. One altcoin on his radar is automated yield-generating protocol yearn.finance (YFI). According to the trader, yearn.finance’s breakout against Bitcoin (YFI/BTC) is a sign that the decentralized finance (DeFi) space is ready to follow suit.
“I don’t have a bag ofYFI, but it’s difficult to not look at the YFI/BTC chart and not believe that DeFi really is getting to ramp up across the board. I’m starting to look for solid projects that haven’t moved much recently that look primed for continuation.”
Source: Kaleo/Twitter
Another coin on Kaleo’s list is Solana-based lending and borrowing platform Oxygen (OXY), which he believes is ready to bounce after carving a bottom at $2.70.
“OXYCalling a bottom on high time frame support. I’ll consider stacking more in the box if we get it. I still believe projects in the Solana ecosystem are undervalued.”
Source: Kaleo/Twitter
As for smart contract platform Polkadot (DOT), Kaleo says it must take out resistance of $48 before the Ethereum competitor can kick off the next phase of its bull market.
“DOTlooks like it should finally be ready soon to break out of the range it’s been stuck in the past 3 months and extend higher. I have a bag.”
Source: Kaleo/Twitter
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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
A bitcoin price crash this week provided investors with an attractive moment to enter positions in the bitcoin market.
While most people reading this article are likely aware of the tweets that were sent out by Elon Musk on Bitcoin mining, his comments are simply noise, and the resulting price crash and derivative market liquidations provide investors who may have been waiting for an attractive moment to enter positions with a great opportunity.
The long-term trends observable in and around the Bitcoin space remain extremely bullish, and the recent three-month consolidation can be thought of as UTXOs simply transferring from weak hands to strong ones, as short-term leveraged traders in derivatives markets have chopped the price of bitcoin in the range of $44,000 to $64,000.
Short-Term HODLer SOPR: Flashing Buy Signal
Short-term HODLer SOPR (36h MA)
With short-term traders setting the price at the margin over this period of consolidation, it is telling to look at short-term HODLer SOPR, which measures the ratio of profit/loss of UTXOs being spent that are less than 155 days old.
Over the course of the last six months, any SOPR break below one has, in hindsight, presented investors with an attractive buying opportunity, and this week’s move should be treated no differently.
An SOPR value less than one implies that the coins moved that day are, on average, selling at a loss (the price sold is less than the price paid), thus when SOPR breaks under one, it is a signal that short-term market actors are capitulating.
Derivatives Markets: Short-Term Tail Wagging The Dog
Futures perpetually funding rate across exchanges since November 2020
While the long-term price action is driven by the monetary preferences of the world changing from fiat money to BTC, short-term price action is driven by leverage and derivatives markets. There have been very few times during this bull market when funding across perpetual futures markets went negative on average for more than 12 hours. This occurred earlier this week, and presented investors a screaming buy signal.
Total long liquidations across bitcoin exchanges
Big Withdrawal Following The Sell Off
Directly following the cascade of liquidations and the sharp correction in the price of bitcoin all the way down to $45,000, a massive outflow of bitcoin could be observed leaving exchanges, an indication that some big time players secured positions at attractive prices as a result of the sell off. While this is purely speculation, it would not surprise me at all if the FUD (read: fear, uncertainty and doubt) thrown out all toward the end of this week was simply chance.
Short-Term HODLer Market Value To Realized Value Ratio
Short-term HODLer MVRV
The short-term HODLer market value to realized value ratio has dropped significantly from where it was in early January. While market capitalization takes the market price of bitcoin and multiplies it by the total outstanding supply, realized cap takes the price of when the coin last moved into account in the calculation. When you take the ratio of market cap by realized cap, it gives you MVRV, and in this case, it measures UTXOs (bitcoin) that moved less than 155 days ago. This metric can give you a sense as to whether the market is above “fair value” in terms of the short-term price action, which is being driven predominantly by speculators in the derivative markets over the last few months.
Short-term MVRV trending lower is very bullish and should give investors confidence the lower it creeps down, that the next bitcoin run up is closer than ever.
Despite months of choppiness in price action, the long-term outlook has never been more bullish, and events such as a legendary Wall Street investor calling for the dollar to lose reserve currency status doesn’t even get the top mention of the week.
Continue to stack your sats friends, or someone else will.
Research firm AllianceBernstein is concluding that crypto trading fees on exchanges are too high, but believes the charges will fall over time.
In an interview with CNBC, Bernstein analyst Harshita Rawat states that, by tracking the value of fees accrued by traditional stock market exchanges, it can be deduced that trading fees in the sector decreased over the last twenty years. Rawat predicts that the same phenomenon will occur in the crypto trading sector.
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“Right now, retail crypto trading, if you look at the fees there, I do believe that’s it’s over-earning as an industry. If you look at stock brokerages, how the commissions there came down in the last two decades, I do think that we are going to see that with retail crypto trading…So crypto is here to stay, but the trading fees will compress over time.”
The Bernstein analyst cites the example of cryptocurrency exchange Coinbase which she says is making bank from the trading fees charged to its retail users.
“Retail crypto trading is their [Coinbase] bread and butter and we believe they are over-earning…
The fact that 90% plus of their revenue comes from retail-crypto trading means that it needs to be valued as an exchange or brokerage.”
Bernstein has initiated coverage on the Coinbase (COIN) stock and assigned a $250 price target. At time of writing, COIN is trading at $265.
Rawat points out that even as crypto trading fees fall, the cryptocurrency markets will record increased trading volumes and a higher market cap over the long run.
“Over the long term, the crypto market cap should continue to grow and trading volume should also be somewhat elevated because of the 24/7 architecture of trading the assets…In the near term though, it’s going to be volatile.”
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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/raigvi/Natalya Yudina
The cryptocurrency market has become a wild show in recent months, perhaps led by Dogecoin’s emergence to the grand scene. The meme coin that started as a joke in 2013, whose founder sold its stack to buy an old Honda Civic back in the day, has been among the best performers eight years after its birth.
Publicly supported by some of the most popular and influential celebrities, such as Elon Musk, Snoop Dogg, Mark Cuban, and more, the DOGE token grabbed people’s attention and skyrocketed in price and fame.
With its ROI of a five-digit percentage in less than half a year, it was somewhat expected that others would try to follow. And this is what indeed transpired. The ever-creative crypto community has dug deep, and copycats started to pop up left and right.
While some of them have roots dating months ago, their popularity blossomed in the past few weeks – led by Dogecoin itself. Today, we will look at some of the DOGE clones on the market.
Shiba Inu (SHIB): The Dogecoin Killer
It wouldn’t be a proper article related to DOGE-wannabes without SHIBA INU. The self-proclaimed “decentralized meme token” describing itself as the “Dogecoin KILLER” is not an invention per se.
Its 22-page ‘Woofpaper’ (yes, the whitepaper is called that) promises that the meme coin is 100% decentralized, which is what the founder – Ryoshi – has vouched the project to be.
Although there’s no pre-set date yet, the project said it’s “dedicated to building the best Decentralized Ecosystem (DECO) on the planet.” Basically, it means the developers are working on a decentralized exchange, which, when (if) ever sees the light of day, will be called ShibaSwap.
The Woofpaper explained the DEX will highlight three “flagship tokens” coming from ShibaSwap – SHIB, LEASH, and BONE. This is what the paper says (it really says that):
“On ShibaSwap, your Shibs will DIG for BONES, or even BURY their tokens. The best trainers even teach their Shibas to SWAP, which allows the pup to exchange one token for another token.”
Despite being nowhere near launching an actual product, the SHIB token (built on Ethereum) has seen indescribable gains in the past weeks. The DOGE copycat is up by over 1,500% since last Tuesday and is currently the 18th largest digital asset with a market cap north of $12 billion.
Furthermore, the adoption widened earlier this week as the world’s leading crypto exchange, Binance, listed SHIB on its platform.
SHIB numbers as of writing these lines, according to CoinGecko:
Price: $0.000017
Market Cap (as of writing these lines): $8 Billion
Circulating supply / total supply: 497,739,233,280,414 / 1,000,000,000,000,000
Leading exchange: Binance
Shiba Inu Bread. Source: AKC
Husky Coin (HUSKY)
While SHIBA INU advertises itself as a Dogecoin-killer, Husky Coin proudly acknowledges the 2013 creation by saying it was “inspired by Elon Musk and Dogecoin.” Additionally, the project’s website reads that Husky is the “little brother of Dogecoin.”
It’s also a meme-based invention, which began as an “experiment” to be driven by a decentralized community. Meaning there are “no founders, no team tokens.”
The developers have locked 45% of the total supply to Uniswap and 5% team token and “threw away the keys.” The remaining 50% was “burned” to Vitalik Buterin – the co-founder of Ethereum.
Husky promises that “as long as Buterin doesn’t rug us,” it will continue growing, surviving, and developing.
Husky was launched in February this year and has already built a bridge with Binance Smart Chain. It also vowes to have a DEX, which should be released by the end of July 2021. The mainnet should arrive by December and will be based on ZEC.
Husky Coin has also enjoyed the past several weeks as its price reached a new all-time high on April 20th, according to CoinGecko.
HUSKY numbers as of writing these lines, according to CoinGecko:
Price: $0.00000004
Total supply: 39,159,500,000,000,000
Leading exchange: Uniswap
Husky Breed. Source: WideOpenPets
ShibaPup (SHIBAPUP)
Perhaps inspired by SHIBA INU, the little brother SHIBA PUP has arrived because “Elon [Musk] asked for it.” Or at least that’s what the website says, but we tend to believe it because there’s a mug with an “I LOVE ELON” sign on it.
Moreover, the site has an entire section dedicated to Elon Musk tweets related to various crypto-dogs.
Outside the one-sided relationship with Tesla’s CEO, ShibPup says its contract is verified by Bscscan, and the token is available for purchases on PancakeSwap.
SHIBAPUP numbers as of writing these lines, according to CoinGecko:
Price: $6.38
Total supply: 1,000,000
Leading exchange: PancakeSwap
Shiba Inu Puppy. Source: TrendingBreeds
Kishu Inu (KISHU)
Another Dogecoin knockoff comes as Kishu Inu – it’s “fully decentralized and owned by its fun, vibrant community.” The project promises instant rewards for users. Meaning, KISHU holders will receive 2% of every transaction in the network.
As with most, KISHU is an ERC-20 token, and its total supply is 100 quadrillion. Somewhat expectedly, CoinGecko shows a massive uptick in the price movement in the past few days as the token is up by 150% since Sunday.
This is even before Phase Three, which promises the launch of a decentralized exchange called KISHU Swap and listings on centralized trading venues like CoinTiger.
KISHU numbers as of writing these lines, according to CoinGecko:
Price: $0.00000001
Total supply: 100,000,000,000,000,000
Leading exchange: Uniswap
Kishu Uni. Source: DogTIme
Doge Token (DOGET)
No, this is not Dogecoin – it’s Doge Token. The project says it’s the more eco-friendly version of its more popular big brother (Dogecoin) as it runs on Stellar. Consequently, this leads to enhanced efficiency that “can not be overstated,” says the website.
Doge Token claims it’s impossible to be the victim of a 51% attack, which makes it “invulnerable.” The simplified auditing process has also made it “more trust-worthy than Dogecoin.”
DOGET numbers as of writing these lines, according to CoinMarketCap:
Price: $0.003339
Market Cap: $26 Million
Total supply: 9,996,778,208
Leading exchange: StellarTerm
DogeSwap (DOGES)
This copycat actually comes with a working DEX carrying the same name. Its whitepaper says the protocol will add several services in the upcoming months. Namely, those are decentralized asset management, NFTs, and digital art, decentralized launchpad and exchange, and staking and farming mechanisms.
The team is also working on a governance token, which will allow the community to vote and decide on DOGES (the current native coin) burns. Users can stake “any amount” of DOGES on the platform and earn rewards as a result.
Despite being slightly down since yesterday, DOGES has increased by more than 300% since mid-April.
DOGES numbers as of writing these lines, according to CoinMarketCap:
Price: $79.5
Market Cap: $1.6 Million
Circulating supply: 20,000
Leading exchange: Uniswap
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A Cardano (ADA) launchpad is skyrocketing in price ahead of smart contract integration on the long-awaited blockchain.
Cardano project accelerator CardStarter (CARDS) is up over 40,000% since launching in mid-April, catapulting from a price of $0.15 at launch to a high of $60.70 on May 11th.
CARDS has retraced since and is trading at $54.19 at time of writing, with a daily trading volume of $10.91 million.
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CardStarter offers projects building on Cardano the option to crowdsource early funding from a community of donors on its platform. CARDS holders are guaranteed early allocation to vetted projects that utilize the CardStarter platform.
Similar products exist on other smart contract protocols such as token launchpad DuckSTARTER on Ethereum (ETH) and launchpad BSCPAD on Binance Smart Chain (BSC).
CardStarter is growing fast, ballooning into a $100 million market cap in about a month and a half, according to CoinGecko.
In April, the team behind Cardano, IOHK (Input Output Hong Kong), announced that smart contract functionality, currently a roadblock to deploying projects on Cardano, will launch this August on the blockchain.
Cardano’s ADA token hit an all-time high this week, surpassing the $2.00 mark for the first time. At the time of writing, ADA is valued at $2.14 up 14% in the last 24 hours.
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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Strategic investor Lyn Alden is convinced Bitcoin has still the potential to reach $100K in the current bull cycle — despite growing uncertainty and increasing volatility.
“We are seeing a lot of froth throughout the industry”, she said, referring to the latest rally in a number of meme coins such as Doge.
“Those are kind of warning signs for the cycle”, she added.
Alden said that with the bull run slowing down and growing risks of a correction, it makes sense for some investors to take some money off the table and put it into some other assets.
“For people who would have trouble with drawdowns or periods of volatility, it can make sense to rebalance”.
Overall, Alden’s position remains bullish given her confidence in the strong fundamentals of the Bitcoin network:
“I have a pretty high conviction on it. And so I’m fine with maintaining a pretty large position.”
Despite a number of altcoins outperforming Bitcoin this year, she doesn’t think Bitcoin is anywhere near losing its leading position in the crypto market. Most altcoins, she pointed out, didn’t manage to sustain the same degree of growth throughout multiple business cycles.
“ I’d be more concerned if I saw protocols that chip into Bitcoin’s market dominance in one cycle and then chip even more into it in the next market cycle”.
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Historically, activity surrounding the Bitcoin (BTC) monthly futures and options expiry has been blamed for weakening bullish momentum. A few studies from 2019 found a 2.3% average drop in BTC price 40 hours before the CME futures settlement date.
However, as Cointelegraph reported in June 2020, the effect faded away. While 2020 seems to have rejected the potential negative impact of CME expiries, so far, the current year appears to validate the theory. Bitcoin’s price has been suppressed ahead of futures and options expiry in the first three months of 2021.
Bitcoin performance before and after CME expiry, USD. Source: TradingView
Some investors and traders have pointed out that Bitcoin’s incredible rally after the recent futures and options expiry dates has become a trend.
$BTC options expiry in about 8 hours…
Last Friday of every month has been a pretty good entry point for past 8 months …
Past 3 months price has been hammered in the hours / days leading up to expiry
Observation not advice. Let’s see if the pattern holds. pic.twitter.com/3CJqI6m6jl
— 阿龍 (@KnutsonJesse) April 23, 2021
BTC has effectively rallied in the days following the expiry, but expanding this analysis uncovers a less-than-satisfactory trend.
Three consecutive events don’t prove a trend
The past 13 months have been nothing short of spectacular for Bitcoin, as the cryptocurrency posted 788% gains. August 2020 turned out to be the worst month, as BTC presented a 7.5% negative performance. Thus, choosing random starting points within the month will likely show a similar positive trend.
For example, if one uses the “last quarter” moon phase as a proxy, the odds that a rally takes place after each event are very high.
Bitcoin performance after “Last Quarter” moon, USD. Source: TradingView
As depicted above, indeed, Bitcoin rallied after five out of the last six instances. The only conclusion might be that positive trends are the norm rather than the exception during bull runs.
Although there might be some explanation to the reason behind Bitcoin’s end-of-the-month underperformance, these are only hypotheses.
While market makers and arbitrage desks could benefit from suppressing the price after a rally, other forces, including leverage futures longs and call option holders, would balance that out.
Bitcoin price did not drop in three of the last seven expiries
Therefore, it makes sense to analyze the potential price suppression ahead of the expiry instead of looking for explanations for a rally during a bull market.
Bitcoin performance before and after CME expiry in 2020, USD. Source: TradingView
Both October and December 2020 expiries failed to present any negative pressure ahead of such dates. Meanwhile, the 12% positive performance on the five days that preceded the most recent April 30 expiry also puts a big question mark on how meaningful the CME event really is.
Considering there hasn’t been a price decrease ahead of monthly futures and options expiries in three of the last seven instances, this evidence should put a nail in the coffin of the unfounded myth.
As mentioned earlier, trying to develop theories on why sellers acted more aggressively on specific dates is unlikely to yield results.
As shown above, Bitcoin’s price failed to underperform in three out of the last seven expiries. A 57% success rate should not define a trend when a positive performance after a specific date has been proven common during a bull run.
The views and opinions expressed here are solely those of theauthorand do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
In a Twitter thread today, billionaire investor Mark Cuban weighed in on the current state and the future of blockchain technology and investment, ultimately concluding that while there are real obstacles to adoption asset prices are increasingly reflective of real “utility” and “demand,” and that the day will eventually come when crypto is “mature to the point we wondered how we ever lived with out.”
Cuban posted the 10-Tweet thread this morning, noting that as the asset class matures prices for cryptocurrencies often are now a byproduct of current use, as opposed to speculative eventual utility.
Crypto and each implementation is evolving in real time from “what is the potential utility” to “What is the current utility and how many users does it have”. Tokens/Coin prices are now less a bet on the future and more a reflection of real demand.
— Mark Cuban (@mcuban) May 15, 2021
“Having more TPS and lower gas fees is not enough,” he wrote, likely referring to often grandiose claims from various layer-one chains with little activity, “There must be a CURRENT network effect and significant user growth. This is a challenge for most L1s and L2s because w few exceptions, marketing in the crypto universe is beyond awful.”
He noted that he often leaves teams “confused” when he asks about “their products, sales , gross margin dollars and profits,” but that these metrics are hugely important in what he characterized as a tremendously competitive field.
Without users what value does a blockchain or L2 solution have ? But, they still haven’t figured out how to sell. They pay premiums to developers and for liquidity and validators. But invest little Marketing to attract users
— Mark Cuban (@mcuban) May 15, 2021
In addition to marketing woes, the Dallas Mavericks owner said that a lack of widespread understanding about key mechanics such as protocol governance is hampering growth. Not enough is being done, he argued, to “emphasize the impact governance can have on platforms, and their products/services.”
Eventually, however, he believes that governance participation — which at its best can be a “thing of beauty” — will become standard:
“I think over time, governance will be expected of all users and most will contribute by at least voting. But today, it is little understood and that’s is stunting some platforms growth.”
One crypto gets over its current phase — one where users need to “be educated and products and services need to be sold and deliver on their initial promises” — then digital assets “can mature to the point we wondered how we ever lived with out.”
Cuban has been especially bullish in his comments on cryptocurrencies as of late, most notably reiterating his support for BTC and Dogecoin as payment options following disparaging remarks from fellow billionaire Elon Musk that may well have crashed markets:
We at https://t.co/VUydpLFzGh will continue to accept BTC/Eth/Doge because we know that replacing Gold as a store of value will help the environment https://t.co/bs7NvnJY8A and https://t.co/ELhbuLOBRV shrinking big bank and coin usage will benefit society and the environment https://t.co/zu08F0STEQ
