Many cryptocurrency investors who now possess stablecoins, according to a senior executive at the software company developing the smart contract platform Avalanche (AVAX), are preparing to enter the markets.
Ava Labs president John Wu claims that despite a sharp decrease in market size over the previous year, the fundamentals of the cryptocurrency sector are becoming stronger in a recent interview with Bloomberg.
He anticipates that stablecoin owners would reinvest in order to make substantial profits in the future.
“The market needs to realise that there will be alpha in the field of cryptocurrency assets. There are many excellent reasons for that.
The fundamentals are definitely getting better and stronger. Regarding the technicals, stablecoins have not decreased in value despite a decline in the market capitalization of cryptocurrencies.
That indicates that many people are just waiting to deploy there in hiding.
When investors outperform the industry average return on an asset, this is known as alpha.
Wu claims that regardless of whether ETH and Bitcoin’s (BTC) risk correlation against the Nasdaq decreases from its present 0.75 level, The Merge will produce alpha returns in respect to Ethereum and its impending switch to a proof-of-stake (PoS) consensus method.
“That’s a significant catalyst. People will likely be surprised to learn that the 0.75 correlation will decrease regardless of how the market performs.
There will be some alpha in the area.
A correlation coefficient of one in statistics denotes a perfectly linear relationship.
The IT executive wraps up by talking about the bear market’s end and what comes after that for the cryptocurrency industry.
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“I personally believe that winter will go a little while longer, but what I’m really looking forward to are these new apps and protocols that will fundamentally alter how companies are developed and run.
When tokenization is fully developed, one option is to encode the business logic into a smart contract, making the platform the business.
Wu continues by using the comparison between employees at the smaller, centralised exchange Coinbase and Uniswap (UNI), a decentralised exchange, as an illustration of how much more daily volume UNI employees may account for.”I personally believe that winter will go a little while longer, but what I’m really looking forward to are these new apps and protocols that will fundamentally alter how companies are developed and run.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
Source: https://www.thecoinrepublic.com/2022/08/28/avalabs-ceo-claims-capital-sitting-on-the-sidelines-is-waiting-to-invest-in-cryptocurrencies/