In an interview with Bloomberg, Joseph Lubin, the Co-Founder of Ethereum [ETH] said that the “trader types” are driving volatility in the cryptocurrency market. Spencer Bogart, a Partner at Blockchain Capital spoke about this statement made by Lubin in a recent interview.
While doing so, he also spoke about the general movement of the cryptocurrency market, and the trajectory that it is set to undertake. He described the growth of the industry in general and stated:
“Undoubtedly, the trajectory is very clear. The industry continues to gain more developers, institutional support is high whether its firms like Goldman Sachs announcing that they’ll be rolling out a trading desk related to crypto.”
Moreover, many speculate that institutional investors are yet to enter the market in a mainstream way due to the lack of a trusted custodian. Bogart remarked on developments in this space as well, and also spoke about sentiment in the market and the cycles it causes. He stated:
“Custody providers are coming online, the trajectory is very very obvious. What we see is market cycles, where thing tend to go up faster than they should and they go down faster than they should. The same things happen in these markets because it’s so retail dominated.”
Bogart also went on to remark on the unique property of the cryptocurrency market as one of the first markets in the financial world where retail investors had the first move. However, he also attributed the volatility of the markets to the investors, stating:
“In general, retail investors are a little bit more emotional than institutional investors. We go higher on the highs and lower on the lows.”
Hunter Horsley, the CEO of Bitwise Asset Management, also offered his opinions on regulatory atmospheres around the world. He commented on the CEO of Coinbase, Brian Armstrong’s statement on mass adoption, stating:
“In terms of time for mass adoption, that’s a really relevant point. I don’t think Brian is wrong about that. I think it’ll take time. Whether it’s a year, 5 years, 10 years, it’s hard to say.”
Horsley made comparisons to the slow rollout of the Internet as seen over almost two decades. He said:
“It’s safe to expect the way the internet has been deployed and really valuable applications were introduced in the 2000s. We would expect that the application and deployment of public blockchains and crypto assets will take some time.”
On the biggest risks in the cryptocurrency space currently, Spencer Bogart stated that time was the biggest tailwind for a lot of investors. Moreover, the adoption of an open financial network is difficult, stated Bogart. He said:
“I think over time dealing with crypto assets amd open financial networks is very difficult. It took a long time for people to adapt to open information systems like the Internet, It’ll take at least as long for people to accept digital assets. As such, it’s going to be reserved for startup disruptors.”
Earlier this year, Larry Fink, the CEO of BlackRock, the world’s largest investment company, stated that he has “not heard from one client” that they want to get into cryptocurrency. Bogart remarked on this, stating:
“Big incumbents like Blackrock saying 0 of their clients are asking about crypto. We have Hunter here, who said in a webinar of 500 RAs, 85% have been asked about crypto. I think this is a market that is emerging from outside the core of financial industry, but its headed directly towards it.”
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