Co-founder of VC firm predicts Crypto’s resilient rise surpasses regulatory hurdles
In a recent Twitter thread, Chris Burniske, partner at crypto-focused venture capital firm Placeholder, shared his thoughts on the impact of the current banking crisis, regulatory challenges, and Balaji Srinivasan’s bet on the future of cryptocurrency. Burniske expressed his positive view on the long-term prospects of crypto, despite short-term volatility and uncertainty.
Burniske believes the current banking crisis has been induced by aggressive monetary policy and will be resolved in the same way. He expects the Federal Reserve and other central banks to cut interest rates, possibly even this year, allowing existing bonds to rise and struggling banks to regain healthy balance sheets. He also argues that the banking crisis is more likely to cause disinflation than hyperinflation when credit dries up.
The placeholder partner goes on to address the ongoing regulatory challenges facing the crypto industry, saying the sector is currently in the “then they’re fighting you stage.” Burniske believes that the intensity of this fight and its prominence on big stages reflects the enormous opportunities and high stakes involved. He notes that crypto will be a significant issue for voters in the 2024 election, which he sees as a sign that the industry is gaining ground.
Despite concerns about the US government’s increasingly draconian approach, Burniske retains faith in the balance of power and the eventual triumph of crypto and open computing systems. He emphasizes the importance of having a solid digital substrate for the future and advises crypto enthusiasts to keep a hardware wallet in case of a darker alternate reality.
As for Balaji Srinivasan’s effort, Burniske sees it as a directional warning, capturing people’s attention in a distracted world. Although he sees disinflation as more likely than hyperinflation in the coming years, he agrees with Voltaire’s assertion that fiat currency will eventually return to its intrinsic value of zero.
Burniske remains long on crypto, arguing that blockchains are critical infrastructure that provide solutions to societal problems, including AI. He remains optimistic about man’s ability to navigate challenges and sees blue skies ahead for the crypto industry.
In a series of tweets On March 17, Burniske shared his thoughts on the upcoming Ethereum network upgrade, originally called “Shanghai” and more recently referred to as “Shapella.” Burniske expects that the upgrade will reduce the risk for Ethereum stakes and pave the way for increased stake percentages. Burniske stated that stake percentages for Ethereum could see a 2-4x increase in the quarters following the Shapella upgrade. He believes this will result in bullish flows rather than bearish and advises market participants to expect volatility but not be misled by short-term price swings.
The placeholder partner also refuted that the Shapella upgrade could lead to a significant dump of ETH in the market. He argued that critics who hold this view have not yet thoroughly considered the upgrade’s implications for market dynamics.
Burniske says 15% of ETH is currently staked, compared to 50-70% for its cryptocurrencies. According to Burniske, the lower percentage of the bet ETH is due to the previously undefined lock-in period, which has given many investors too much risk. However, the Shapella upgrade will introduce a more defined lock-up period, which Burniske believes will encourage more people to bet on ETH.
Additionally, he expects the Ether-Bitcoin (ETHBTC) ratio to show temporary weakness before breaking out to the upside following the Shapella upgrade in April. Burniske also commented on the broader crypto market, noting that Bitcoin (BTC) rallying while traditional banks falter is central to the industry. He suggested that as Bitcoin’s momentum slows, it could match Ethereum’s push for increased efforts after Shapella.
Image credit
Featured image via Pixabay
