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We've been on a few Markets are booming this weekAnd it's not over yet. At the very least, we should be happy that there is nothing really boring in the world of cryptocurrencies, right?
Anyway, I caught up with Kraken Head of Strategy Thomas Perfumo to pick his take on the markets given the volatility we've seen.
For Perfumo, the decline was in line with what he calls the “new normal” after Bitcoin surpassed $100,000.
“We have seen some pullbacks consistent with significant liquidations of leveraged positions. This is typical consolidation behavior,” Lee said.
“From observations over the past two cycles, the rally in altcoins is taking hold after the surge in Bitcoin. This is triggering a shift into altcoins as investors seek to outperform in the next phase of the bull market.”In the past two cycles led by Bitcoin, the peak coincides with Market cycle with the dominance of Bitcoin’s market cap, which is currently in the mid-50s, dropping to roughly 40%,” Perfumo added, supporting where we were. Discuss here on Empire.
If we continue to see altcoins outperform, Perfumo believes there will be a “spike in interest.”
“People are looking for signs that cryptocurrency services are seeing mainstream adoption. Stablecoins have already broken previous records in terms of circulating supply, and DeFi's total value of locked funds (TVL) is approaching peak levels in 2021. “We believe the combination of improvements “The significant scalability over the past cycle and the line of sight towards a more accommodating and growth-friendly agenda for crypto innovation will result in an environment ready for crypto services to catalyze a new wave of adoption.”
But, as I wrote yesterday, it may be time to start preparing your bags for the decline in liquidity in the next few weeks, which is typical of this holiday period. Perfumo suggested that some selling may be postponed until the new year, as people in the US base their moves specifically on the potential tax consequences.
“It is certainly possible that a lack of liquidity will lead to higher price volatility, both to the upside and to the downside,” he said.
Speaking of next year, Perfumo has agreed with Canary Capital's Stephen McClurg that The course still has a lot of legs.
Not only did Bitcoin deployments win, he noted that DEXs and some infrastructure operations also won Lots of venture capital backing - Ready to spread wins throughout the year.
However, some other sectors, such as web3, gaming and the metaverse, have not yet reached this stage. Or, if we're being honest, we're nowhere near ready for mainstream attention with a few exceptions (looking at you Off the grid).
That doesn't mean there can't be dark horses among the projects yet to gain mainstream attention, Perfumo said.
Either way, he's optimistic about the environment, and he told me this is the perfect recipe for innovation in this area.
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