CEO Of Company Behind Avalanche Says Capital Is Sitting On The Sidelines Waiting To Jump Into Crypto – Here’s Why
A top executive at the tech firm building smart contract platform Avalanche (AVAX) believes many crypto investors currently holding stablecoins are preparing to buy into the markets.
In a new interview with Bloomberg, Ava Labs president John Wu says the crypto industry’s underlying fundamentals are getting stronger despite a sharp decline in market capitalization over the past year.
He expects stablecoin holders to reinvest to reap significant profits down the road.
“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 basics certainly increase and improve. [As for] the technical, if you think about the market values of cryptos, they have gone down, but stablecoins have not.
It tells you that a lot of people are just hiding in there ready to distribute.”
Alpha refers to when investors get more than the average return on an asset.
Regarding Ethereum and its upcoming transition to a proof-of-stake (PoS) consensus mechanism, Wu says The Merge will generate alpha profits regardless of whether ETH and Bitcoin’s (BTC) risk correlation against the Nasdaq falls from the current 0.75 level. .
“That’s a big catalyst. I think what’s going to surprise people is that 0.75 correlation, wherever the market goes, will go down.
You’re going to have some alpha in the room.”
In statistics, a correlation coefficient of one indicates a perfect linear relationship.
The technologist concludes by discussing the end of the bear market and what’s next for the crypto space.
“I personally think winter will be here a little longer, but what I’m really looking forward to are these new applications, these new protocols that are literally redefining the way businesses operate and will be built.
What you can do when tokenization is here in full swing is you’ll code the business logic into a smart contract, and then the platform is the business.”
Wu then cites the example of how employees at the decentralized exchange Uniswap (UNI) can account for much more daily volume per person than the larger centralized exchange Coinbase.
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Featured image: Shutterstock/KeremGogus/Sensvector
