Ethereum Merge is a ‘generation-changing event’ – Valkyrie Investments

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(Kitco News) – Mitigating risk with Ethereum, in general, is the main approach that Valkyrie Investments has taken in recent months as the buzz about the upcoming Ethereum merger has been growing throughout the cryptocurrency space.

Kitco Crypto recently sat down for an interview with Bill Cannon, head of portfolio management at Valkyrie Investments, to gain insight into the company’s outlook on Ether and the broader crypto market ahead of the much-hyped transition to proof-of-stake.

“We haven’t really scaled back drastically, but we’re just looking at it, trying to see what’s going on and what’s going on with developers,” Cannon said regarding Merge-related developments.

“Obviously there are big benefits to the transition, but overall, we’re just being careful. We’re looking at what we can do and we’re looking at opportunities across all platforms, across all protocols.”

The Merge is one of the biggest events to happen within the cryptocurrency sector in several years, a “generation-changing event”, according to Cannon, as “Ethereum is part of the overall cryptocurrency growth strategy.” .

As for whether or not the leading smart contract platform will form the basis of the new Internet, Cannon compared its evolution to that of the Internet boom in the late 1990s and early 2000s, where many of the early companies that received a lot of attention actually spawned many smaller ones.

“People forget that in the NASDAQ 100 in the late 2000s there was a small company called Apple. Back then they didn’t have the IPOD or the revolutionary Mac pros, they were just ideas.”

Cannon suggested that we are now in a similar position and are just getting started in the development of blockchain technology.

“There is so much growth and opportunity, people are excited about innovation in the industry and I think it’s just a matter of time.” The pace of development can make it a challenge to keep up with everything that’s going on, according to Cannon, who “can’t even keep up with the news and innovations that happen on a daily basis, if not hourly.”

“We think Ethereum is maybe a leader, but we’ll see what happens. People like to innovate off of other things,” Cannon said.

One of the driving forces of change within the ecosystem has been an increase in regulatory action, leading to more institutional-backed money pouring in and reshaping the landscape.

Cannon sees this as a positive development as it is attracting more multinational corporations into the blockchain space, which will bring more use cases for the average user.

The early days of digital payment processors like PayPal and Zelle saw hesitation on the retail side, as people were initially scared of transacting over the internet. Eventually, the public opened up to digital payments; it just took time to build trust.

“Those kinds of changes in society are slowly happening on the blockchain,” Cannon said. “It’s just a matter of people having a better understanding of what blockchain can offer.”

For now, the main focus of the blockchain sector should be on weeding out bad actors, which are a problem with all growing sectors trying to establish themselves.

The benefit of regulations

On the regulation front, Valkyrie welcomes a more transparent set of guidelines as it will help institutions better understand how to serve the blockchain community in a legal manner.

“We are in favor of regulation because it puts in place a set of rules, a set of guidelines that all people can play under. Now the game is set and now people can start creating because they know the rules,” Cannon said.

For those who think more rules and guidelines would stifle growth in the sector, Cannon demurred, suggesting it would actually have the opposite effect.

“It would make it better, it would make it safer for people. That’s probably one of the key issues that some regular investors are shy about, because of the lack of regulation.”

As for how crypto and blockchain can actually benefit society, Cannon pointed to places like Argentina, which have been experiencing hyperinflation lately.

“They’re using cryptocurrency as their solution. They’re getting their paychecks; they’re getting involved in certain cryptocurrency projects. All from their phones, that’s the magic part of it. That’s the innovation that hasn’t happened before. Where people can find solutions to improve their lives through a phone and applications”.

People in the US and other prosperous countries with functioning financial systems don’t need these kinds of benefits from cryptocurrencies yet, but they may someday in the future.

Discussions about using Bitcoin as an inflation hedge are still “too early,” according to Cannon, who suggested that it will likely take another 3-5 years for it to become a reality. For now, Valkyrie sees Bitcoin and other cryptocurrencies as “more tied to risky assets.”



Going forward

On the topic of what comes next, Cannon pointed to the “sustained hawkish comments from the Fed,” which have taken people by surprise as the source of currency weakness throughout the crypto market.

There is little reason to believe that the central bank will deviate from its plans to raise interest rates unless something breaks badly in the economy. “We see more rate hikes, especially for this year. Domestically, we’re looking at a 4% terminal rate in terms of rate hikes, which is still some way off,” Cannon said.

The US mid-term elections are also a factor influencing the market, which could put “more stress on the markets in the coming months”.

On that front, Cannon noted that “Both sides are now realizing that digital assets and cryptocurrencies are the future, or at least part of our future. They’re going to be part of what society needs, part of that transparency.” , part of that security. .”

In general, the future of cryptocurrencies really comes down to the services it can provide to the average user to help improve their everyday lives.

“We are looking for public services in the sector and we are looking for people who adopt cryptocurrencies as part of their lives.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has gone to great lengths to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange of commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for loss and/or damage arising from the use of this publication.

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