We talked about three promising cryptoactives with Orlando Telles, director of research at Mercurius Crypto, an analysis house specializing in cryptoactives.
Are cryptoactives just cryptocurrencies?
No. Unfortunately, many investors have this view that the cryptoactives market comes down to the idea of “decentralized currencies”, especially for knowing this universe through bitcoin. Because of this, people believe that digital assets only have the purpose of storing value and means of payment.
However, since 2015, with the creation of smart contracts via the Ethereum blockchain, blockchain use cases have grown exponentially. Currently, there are several cryptoactives with the most varied purposes. From assets that work like a decentralized broker, like Uniswap, to decentralized loan protocols, like Aave. Many of these assets work in a similar format to traditional companies, even generating cash flow.
It is important to emphasize that the value of these assets lies in the ability to create more efficient and transparent processes compared to the traditional market. Thus, the most interesting assets are those that have the clearest use cases and that generate the most efficiency.
In your opinion, what are three promising cryptoactives?
I believe that more and more cryptocurrency investors are looking at the usability of this market. For this reason, for me, the most promising assets are the ones that enable the greatest number of use cases.
In this sense, the first asset I highlight is ether, the native currency of Ethereum’s blockchain. Ethereum is today’s biggest blockchain, estimated to trade more than $8 trillion in 2021. It brings together most of the use cases from the cryptocurrency market, such as leading DeFi market tokens like Uniswap and Aave , as well as the Metaverse, blockchain games and entertainment segment.
Ethereum is undergoing deep updates to its protocol, both in terms of monetary policy and in terms of scalability due to ETH 2.0, which should be a major asset value unlock and possibly a factor that will make ETH be more valuable than bitcoin soon.
Another asset that deserves to be highlighted, also for its usability reasons, is Chainlink. It is a platform of oracles, which are fundamental devices for connecting real-world data with the blockchain ecosystem. So the vast majority of applications in the DeFi ecosystem require Chainlink to carry out their operations.
This usability is evident from the fact that of the 17 largest protocols in the DeFi market, 13 use Chainlink services. This shows that, should there be a significant growth in the DeFi market in the coming months, there is a clear trend towards an increase in Chainlink’s usability and, consequently, in the price of the asset.
Finally, I highlight the growth of Uniswap, the largest decentralized exchange in history. It is a brokerage that works without the need for custody of users and with an instantaneous asset exchange format. This model has been around for a few years and has attracted many users. So currently Uniswap has a volume similar to that of the largest brokers in the world, such as Coinbase.
The asset has been undergoing several important upgrades that have significantly increased its efficiency. Based on the latest information from those responsible for the asset, Uniswap may close possible partnerships with major players in the traditional market such as PayPal and Robinhood later this year.
How have you seen the cryptoactives market? Will bitcoin remain the main cryptocurrency in the world for a long time to come?
For me, the value of the cryptocurrency market lies in the efficiency it generates for existing processes, as it is a technology market. Based on this reasoning, I believe that bitcoin is not the asset that generates the most efficiency for the market today, among all existing cryptoactives.
Platforms like Ethereum allow for numerous use cases compared to bitcoin, which can impact the financial industry much more profoundly. As such, I believe this will reflect on asset prices in the long run, which is why I don’t believe bitcoin will be the biggest cryptocurrency in the long run. In fact, I believe it may soon be surpassed in terms of market value.
The cryptocurrency market is a technology market, so the most efficient assets that have the ability to evolve faster tend to be the most valuable. For this reason, it is so important and fundamental to study this market.
Three questions: digital currencies, cryptocurrencies and regulation