Like the optimism and do agree on a number of considerations including the long term prospects for the space. I am still however concerned about the correlation btw crypto & tradfi/macro. To this extent, should we see meaningful risk off turn, I suspect crypto may also decline together with other asset classes. In that scenario BTC may actually do relatively better (or less worse) than ETH precisely because of its lower beta.
Another two reasons why BTC may overall be a more resilient bet are:
- At some point Gold's strong trend (and decoupling from real rates) may rub off BTC as well as the analogy of use case (SoV).
- Any regulatory clampdown is more likely to affect ETH disproportionately vs BTC especially when it comes to the DeFi space.
Totally agree on the correlation btwn tradfi and crypto and the risk of an equity meltdown. However I think it would require a significant sell off to send ETH back towards my stop, and I think in a sideways equity market, ETH will outperform. In any case, a sharp risk-off move is not my base case right now so I'm happy to be on the risk-on side of the spectrum.
WRT gold vs BTC, I think strength in gold does send a market signal that BTC should be strong as well (due to prospects of lower real rates). However this doesn't prevent ETH from outperforming. The scenario where I see BTC outperforming due to SoV status is if a major central announced it has or will be accumulating BTC for its reserves.
I also agree that regulatory clampdown is probably coming at some point, but the time frame is unknown so I'll worry about that when it happens.
Like the optimism and do agree on a number of considerations including the long term prospects for the space. I am still however concerned about the correlation btw crypto & tradfi/macro. To this extent, should we see meaningful risk off turn, I suspect crypto may also decline together with other asset classes. In that scenario BTC may actually do relatively better (or less worse) than ETH precisely because of its lower beta.
Another two reasons why BTC may overall be a more resilient bet are:
- At some point Gold's strong trend (and decoupling from real rates) may rub off BTC as well as the analogy of use case (SoV).
- Any regulatory clampdown is more likely to affect ETH disproportionately vs BTC especially when it comes to the DeFi space.
Totally agree on the correlation btwn tradfi and crypto and the risk of an equity meltdown. However I think it would require a significant sell off to send ETH back towards my stop, and I think in a sideways equity market, ETH will outperform. In any case, a sharp risk-off move is not my base case right now so I'm happy to be on the risk-on side of the spectrum.
WRT gold vs BTC, I think strength in gold does send a market signal that BTC should be strong as well (due to prospects of lower real rates). However this doesn't prevent ETH from outperforming. The scenario where I see BTC outperforming due to SoV status is if a major central announced it has or will be accumulating BTC for its reserves.
I also agree that regulatory clampdown is probably coming at some point, but the time frame is unknown so I'll worry about that when it happens.