Vance Spencer, co-founder of Framework Ventures, analyzed the macro development status of the cryptocurrency industry and market. He believes that both BTC and ETH have positive factors, regulations are gradually becoming clear, the Fed’s interest rate hike is also coming to an end, and the position of cryptocurrencies is much better than anyone thinks.
There are 280 days left until Bitcoin’s halving, and a spot Bitcoin ETF looks set to launch by the end of this year. Ethereum has successfully transitioned to PoS and has been in a deflationary state all year, with ETH’s economics attracting the attention of major banks. Three DeFi apps are expected to reach $100 million ARR this year (during the bear market). While the launch of crypto games has been delayed, it is still on track for release in Q4/Q1, which will bring millions of new users. With stablecoins and market structure proposals up for vote this summer, regulatory clarity is also on the horizon.
Cryptocurrencies have weathered a 525 basis point hike from the Fed and are at the other end of the most severe deleveraging in financial history. The market expects the Fed to hike once more with 95% certainty, then end hikes. The Fed’s dot plot suggests that the headwind of rates will turn into a tailwind in 2024 and 2025. The trajectory for 2019 and 2023 is very similar.
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Sentiment is still tense. Cryptocurrency holders are still nursing wounds from 2022, and feel underexposed to recent gains. Tradfi is generally underexposed and lacks fundamental access to the asset class. In conclusion, the position of cryptocurrencies is far better than anyone thinks. We are replacing the financial system with software that either no one or everyone can control. Exciting times ahead for the next few years and decades.