Waves Crypto Up 1000% YTD 🚀 Can It Continue? | Technical Analysis & Price Prediction
DeFi market is booming
Stablecoins are safer than banks
ETH token will not be more popular than bitcoin in the next 5 years
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Bitcoin, gold and a range of altcoins are showing steady growth in value. Token As the use of cryptocurrencies grows, new types of tokens are emerging. They can represent value or something intangible like voices. Two … More ETH for the first time exceeded its annual high and broke the $ 300 mark. What awaits the market for altcoins and stablecoins, BeInCrypto discussed with Alexander Ivanov, founder of the Waves Exchange.
– The altcoin market is developing rapidly. According to the latest research by Arcane Research, the capitalization of ETH after the crash on March 12, 2020 increased by 75%, overtaking even Bitcoin. What is the reason for such popularity of ETH?
A.I.: Talking about why the ETH is growing faster than the military-technical cooperation, it is necessary to single out 3 factors. The main one is the explosive growth of stablecoins and DeFiDecentralized finance (DeFi) is financial services built on the basis of blockchain technology that offer users access to an open, efficient and … More amid the crisis. Investors are looking for ways to save money and earn, and the rates on crypto deposits are much higher than in a bank. And the Ethereum blockchain serves as the basis for both the main stablecoins and all popular DeFi platforms. By the way, this popularity has a downside. Recently, online transactions and processing times have grown dramatically – precisely because there are so many transactions with stablecoins.
By the way, we must not forget about staking, which, by the way, contains many times more funds than DeFi. Staking coins like Tezos and Neutrino USD work on other blockchains and their capitalization is also growing. At the same time, the speed in these networks is many times higher than that of Ethereum, and the fees are close to zero..
The second factor in the growth of the ETH price is the hype around the launch of Ethereum 2.0. Every time developers make positive statements about this, the price goes up..
Finally, we must not forget that the ETH price movements traditionally follow the Bitcoin movement, but with a larger coefficient. That is, the scale of price movement in percentage for the ETH is usually higher. The reason is that the capitalization of the ETH is 6 times less, and the smaller the coin, the easier it is to show big Xs..
– At the same time, Bitcoin and its forks BCH and Vitcoin SV do not show the same growth as ETH. Why? What is the reason?
A.I.: In January-February, there was a strong jump in the price of BCH (more than 100%) and BSV, but it was caused by a speculative scheme (pump-and-dump), the details of which are still not entirely clear. At the beginning of July, the BSV price suddenly jumped again by 20%.
But these are all short-term rallies, and at a fundamental level, BCH and BSV have no reasons of their own to rise. They were created as an improved version of the military-technical cooperation, but the users did not understand why they were better. They have neither the status of the first and main cryptocurrency, nor an important role as the basis of the ecosystem, like the ETH. Basically, these are speculative assets with a small handful of fans..
– Small-cap altcoins are rapidly gaining popularity. Why? After all, many experts believe that 90% of altcoins on the market are dummies.?
A.I.: There is a real growth in popularity, and then there are pumps. Some altcoins have great use cases – say interoperability, decentralized stablecoins, liquidity pools, loans, etc. They grow thanks to the efforts of the developers and the quality of the product. Examples – Aave, Neutrino USD, Kyber, Synthetix.
On the other hand, you need to understand that the lower the liquidity, the easier it is to manipulate the price. Just a few people can create artificial excitement and cause a pump, as it was, by the way, with BSV. Gainers & Losers on CoinMarketCap is full of dummies that grow by 50% with small daily volumes.
Therefore, when analyzing “dummy or not”, one should look not at the percentage of growth itself or at the date of issue, but at the technology, at the product itself.
– Will altcoins be able to outpace the superiority of bitcoin? Will they become more popular in the future?
A.I.: I do not think that in the next 5 years any altcoin – even ETH – will bypass the MTC in terms of capitalization. But cap and daily trading volume are not the only measures of popularity. Even more important is the volume of transactions on the network. If crypto really becomes a massive instrument of money transfers, payments, loans, etc., then people are unlikely to use slow and expensive bitcoin for these purposes. On the other hand, Ethereum has recently also started to slow down, and the cost of transactions has become even higher than that of the BTC. So, those altcoins that offer the fastest and cheapest transactions will have an advantage..
– How the launch of Ethereum 2.0 will affect the price of ETH?
Bullish on WAVES! Emerging strong after our alts massacre!
A.I.: First you need to wait for this launch :). Many expected this to happen in July, but in the end, the launch was again postponed until at least December. In any case, so far we are not talking about the launch of Ethereum 2.0 as a final product, but only about “Phase 0”, which will coexist with the current version of Ethereum. The real transition to Ethereum 2.0 will take years.
But let’s say that in December, “Phase 0” still starts and PoS staking is activated. Many will want to buy ether to create a steak, that is, demand will grow, but this growth is unlikely to be significant. Rather, I expect an exuberant surge in prices. It will be followed by a partial disappointment when less knowledgeable users finally realize that the “real” Ethereum 2.0 at a speed of a million operations per second until it is expected that sharding is not working yet, etc. Then the process will be repeated with phases 1 and 2.
– Altcoin Compound shows a rapid rise in price. Why? What contributes to such enchanting growth? Could this be another bubble about to burst?
A.I.: Compound is not a bubble, but a decentralized loan protocol that actually works. It can burst, or at least deflate, only if the so-called illiquidity event occurs, that is, there is no money in the pool to satisfy the withdrawal requests of depositors. However, Compound has a special stabilization mechanism for this case, just like in any high-quality DeFi protocol, say, USDN.
As for the growth of the COMP token, it is, of course, excitement. Many factors coincided: the announcement of the listing on Coinbase, the popularity of yield farming (passive income from holding the token), finally, just that the coin is new. But everything is already back to square one: after the peak on June 21, COMP 50%. However, this coin definitely has a future..
– What altcoins, in your opinion, will be popular among Russians?
A.I.: I would bet on dollar stablecoins. The realities of the Russian crisis are such that it is necessary, first of all, to somehow preserve the savings. Stablecoins are definitely more reliable than Russian banks, and besides, you can earn interest with them, which will not be affected by inflation. For example, Neutrino USD brings 8-15% per year in dollars from staking, with USDT you can get up to 6% of loans, etc..
As for speculative altcoins, it is unlikely that many Russians have free funds for such risky investments..
– Is it worth investing in altcoins and in what?
A.I.: Of course it’s worth it. Again, the best option is stablecoins that generate income – for example, USDN. Also worth looking at are Cardano and Stellar as cheap coins with good fundamental potential. And, of course, Ethereum, but in this case it is worth waiting for the next unpleasant news from the developers (say, a delay in the release) in order to buy ETH “at the bottom”.
– Thanks for the conversation!
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