Bitcoin and altcoin pricesyellow continued to decline in the second week of the new year. The sharp declines came as little surprise to Ben McMillan, who warned of increased volatility in the crypto and traditional markets for much of the past year. McMillan, chief investment officer of the $650 million IDX Digital Assets, shared his thoughts on the cryptocurrency markets in an interview last week. As Kriptokoin.com we provide the details…
Comment from McMillan on Bitcoin, Ethereum, Fed and institutional investors
McMillan for Bitcoin and Ethereum He thinks the structural bullish situation is still intact. The advancement of Bitcoin’s Lightning Network and the activation of its major update in 2021 have helped accelerate its use case beyond just a store of value or anti-inflation tool. Fueled by the padollarm in the series of DeFi and NFT activities in its network, Ethereum has grown and will transition to proof-of-stake. Even though these factors are giving rise to fiadollarsars, he believes the increase will come with extreme volatility. He even says that if Bitcoin drops to $ 100,000 this year, it will not be surprised if it falls by 50 percent in the same year.
In the US, the Federal Reserve has signaled its readiness to shrink its nearly $9 trillion bond portfolio, as well as potentially raise interest rates faster than expected. McMillan said, “New entrants to Bitcoin are financial advisors, asset managers; they create portfolios with crypto exposure. Therefore, they are much more sensitive to things like how Bitcoin trades with other asset classes, interest rates, macro risks and inflation expectations.”
4 altcoins that attract attention from institutions: The first is Bancor
McMillan, IDX Digital Assets’; He said he is working with institutional investors and other asset managers who are increasingly beginning to distinguish between crypto protocols rather than focusing solely on Bitcoin and Ethereum. Specifically, he noted that institutional investors are showing an increasing interest in decentralized finance applications (DeFi), which provide a range of automated borrowing, lending, trading, insurance and wealth management services through software.
One of the DeFi protocols that saw increasing corporate interest was the decentralized exchange protocol Bancor (BNT). McMillan says the interest in this altcoin is based on the way they’ve been proven institutional from day one and the way they’ve built their DAO. McMillan added that Bancor’s version 3 is a catalyst that could improve the token’s performance this year, noting that the update is set to improve many features such as unilateral staking without permanent loss
Chainlink, Near and Loopring also draw attention
Another coin that attracted the attention of institutions was Chainlink (LINK), which provides oracle servicedollar series for DeFi platforms. “This is another protocol that seems relatively undervalued compared to some of the other protocols in 2021,” McMillan said. “Based on the basics alone, I wouldn’t be surprised to see it perform well this year.”
Smaller protocols are also starting to gain institutional attention. For example, according to McMillan, Near Protocol (NEAR)’s proof-of-stake blockchain is attracting both developers and large investors. As demand continues to rise for lower transaction fees and higher speeds on the Ethereum network, McMillan thinks layer-2) scaling solutions may receive much more attention in 2022. He says that Loopring is on the radar of Loopring (LRC) in this area, using the following expressions:
In 2021, we saw that layer-1 protocols like Avalanche and Solana had a really big year. Much will depend on how successful the ETH 2.0 upgrade is in addressing Ethereum’s gas fees and scalability issues. I think this will be a key determinant of what the continued demand for these alternative tiers and these second tier solutions will look like in 2022.”