The CEO of the Company Behind Avalanche Says Capital Is Sitting On The Margin Waiting To Jump Into Crypto - Here's Why
A senior executive at smart contract platform builder Avalanche (AVAX) believes that many crypto investors currently holding stablecoins are preparing to buy into the market.
In a new interview with Bloomberg, Ava Labs president John Wu said that the crypto industry's fundamentals are getting stronger despite the market capitalization that has plummeted over the past year.
He expects stablecoin holders to reinvest for a substantial return.
“What the market needs to understand is that there will be alpha in the crypto asset space. There are very good reasons for that.
The fundamentals are completely increasing and improving. [As for] technical indicators, if you think about the crypto market cap, they have gone down, but stablecoins have not.
That tells you there are a lot of people lurking in there ready to deploy. "
Alpha refers to the time when investors get more than the average return on an asset.
When it comes to Ethereum and its impending transition to proof-of-stake (PoS) consensus, Wu said The Merge will generate alpha returns regardless of ETH's risk correlation and Bitcoin (BTC) against Nasdaq is down from its current 0.75 level.
“It was a huge catalyst. I think what will surprise everyone is that the 0.75 correlation, no matter where the market goes, is going to go down.
You will have some alpha in space. ”
In statistics, a correlation coefficient of one indicates a perfectly linear relationship.
The tech CEO concluded by discussing the end of the bear market and what's next for the crypto space.
“Personally, I think winter will be here for a little longer, but what I'm really looking forward to is these new applications, these new protocols that really redefine the way businesses operate and will be built.
What you can do when the encryption is in full swing is you will code the business logic into a smart contract and then the platform is the business. ”
Wu then cites the example of how employees at decentralized exchange Uniswap (UNI) can account for much more daily volume per person than the larger centralized exchange Coinbase.
Aug 27, 2022