What's behind the latest cryptocurrency rally, as ethereum hits an all-time high
s macro based investors and theyre, starting to use bitcoin to hedge out inflation. And then what you see is once people tend to get into bitcoin, then they start to to spread out and what we saw over the last couple weeks was uh. Big banks like jp morgan, came out and said: listen. It might be better to buy ethereum over bitcoin in this type of environment, but the the message is is that institutional investors are here, theyre, investing and thats whats keeping the bid under the market. Frank. I know you think theres also been catalysts ranging from the launch of the futures, etf or etfs. To you know, funds being raised by softbank and others. Major new fund launches that kind of thing yeah, you, you see a a vast amount of capital pouring into the space and thats been pushing up valuations, thats kind of the backdrop of this rally. Right i mean i was talking with my colleagues today about one startup thats, raising a 400 million dollar valuation in the non non fungible token market, so the amount of capital pouring in is immense and nft is specifically frank. I mean how much has that been a catalyst of interest in ethereum i mean is that why its been outperforming? Well, you have the the value kicks up to the blockchains, on which a lot of these different projects are being built. So you have nfts on solana. You have nfts on ethereum, so as these nft projects and companies launch or metaverse companies as well, that value is going to kick up to the blockchain on which theyre built and facebooks announcement that theyre sort of going all in on the metaverse has been a huge Boon for companies offering services in that market and i think youre going to see a huge wave of new entrepreneurs in the metaverse come to market over the next few months, which will help point prices as well so brian.
What? What is the regulatory risk here? As these as these cryptocurrencies seem to be getting more and more traction more and more value and institutional interest, what do you think might happen there yeah, so the regulatory risk is declining. I mean relative to what it was two or three years ago. When it, you really didnt have a sense of what the regulators were. Thinking um, what weve seen and what weve heard from the regulators is that this is a new technology, a new industry. They dont want to stifle growth in that, but lets figure out the framework to go around what these assets are, and so i do think there is still a regulatory risk uh that potentially something that is one of these coins or one of these protocols are doing Today may not be something that they could do in three to six months. That risk is diminished tremendously, because the regulators are really understanding. What is going on here that this is a new technology and is really a new growth engine for the us economy. It is one of the one of the only big growth areas, particularly now that facebook has said hey. The metaverse is going to be something new cryptos already been in the meadowverse for a long time, and on that note brian, do you think that it does go back in many ways to facebook? You know renaming itself, changing the ticker and all the rest of it.
As evidence that this is all going mainstream, because when you talk to people who want to invest their money in this space, do you basically tell them okay, stick with bitcoin, or is it look into nfts, look into ethereum? Think about the metaverse that sort of thing yeah. I think i think you really do need to take a portfolio approach. I mean if you just buy bitcoin youre going to capture you know, lets call it 70 80 of the upside of crypto, its kind of like buying a s. P 500 index fund youre going to catch all of it. But if you really want to get dig into what this new technology is, you do want to look at ethereum and solana and frank mentioned. You know theres a lot of uh, nfts and d5 built on these. Remember a lot of these other protocols work very much like a digital oil that you need these, these tokens to use the protocol and with ethereum on a lot of this. They actually burn that so you get a declining uh inflation rate or declining supply of these. So it kind of serves if you go further out on the curve. Besides bitcoin you get a lot of the characteristics of bitcoin plus this kind of new tech call option kicker, so id encourage everybody to go out there and look at you know lets call it. The top 30 or so cryptocurrencies by market cap. Well, you got to be careful, though you might get squid game in there for a day or two you may i try to stay away from squid im, a calamari guy, yeah yeah, exactly guys.
Thank you today, brian kelly, frank shaparo, talking crypto.