As markets become more volatile, cryptocurrencies can provide pockets of haven.
There are four catalysts that could cause a revolution in cryptocurrencies, according to Haouk Lee, founder and CIO of Trinity Digital Assets.
Prior to his entry into the cryptocurrency space, Lee invested in real estate in emerging markets. Starting in 2017, he started investing in Bitcoin (BTC) and Ethereum (ETH).
Lee was first drawn to crypto assets because they “outperformed every other financial asset” and because of their network effects.
“We … are using a four-pronged strategy in terms of playing this market,” Lee told David Lin, producer and presenter at Kitco News.
“[We are] “Dealing with” the BTC and ETH we have accumulated, maintaining an open trading ledger with active liquid, playing the DeFi market for returns… and the final component is offering free advice to many offices and family organizations on how to play this space. ”
The current economic environment is not promising for investors in risky assets. The Federal Reserve recently raised the interest rate by 50 basis points. The Federal Reserve intends to continue to tighten monetary policy.
When asked if he was concerned about selling off risky assets like cryptocurrencies, Lee replied, “It’s uncharted territory… We’re looking forward to entering a recession. But even in the crypto space, regardless of your long-term holdings, you can be on the [safe] side in stable coins. And in these volatile markets, I think one of the things you can do is try to get a return on your stable coins.”
“Another thing you can do… is to sell covered calls on BTH or ETH, or even SOL, which have sufficient liquidity. Or, if you are going to become a perpetual buyer of Bitcoin and Ethereum… [a strategy] is selling.
Lee also sees four catalysts that could benefit the cryptocurrency market.
“The biggest catalyst for the entire ecosystem will be the ETH consolidation that is due to happen,” he says. “When Ethereum transitions from Proof of Work to Proof of Stake… it becomes a dividend-paying stock.”
“ETH is around $2,830 at the moment. If you look at DCF [discounted cash flow]Basically, we’re looking at 10,000 ETH – with no terminal value set. So this kind of talk tells you how much you underestimated this matter.”
Lee’s second incentive involves companies entering the cryptocurrency markets.
“The corporate treasuries of these big companies are starting to get returns on their short-term capital loans – using the DeFi protocol… They are aiming for an 8 to 12 percent return.”
Lee’s third catalyst is the Spot Bitcoin ETF, which has yet to be approved by the SEC.
“You know, people are pessimistic that it’s going to happen under the Gensler administration,” he told me. “If that happens, it will be because of political pressure.”
Lee also sees a potential change in BTC liquidity as the ultimate catalyst. “the last [catalyst] It is basically the liquidity of Bitcoin… Currently there is only about 12 percent of the circulating supply of Bitcoin on the central exchanges. And when I talk to the OTC offices, there is not enough liquidity.”
“So, what happens is a lot of establishments buy it, and then they take it off and put it in cold storage. So, in terms of supply shock, that could come in the latter half of this year,” he said.
To see how Lee thinks he can make money from ETH staking, as well as his BTC price prediction, watch the video above.
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