Multicoin founder: The tech crypto faction will dominate the market in the future, and Bitcoin will be reversed
It is expected that SOL and ETH will perform significantly better than BTC in the next "bear market."Written by: Kyle Samani, Co-founder of Multicoin
Compiled by: TechFlow
Why the next bear market won't be like the last one? In fact, we may not have a bear market at all, or we might have a half bear market; however, how we define market conditions depends on your perspective.
Broadly speaking, there are two groups in cryptocurrency: monetary crypto and technological crypto. From 2011 to 2017, the zeitgeist of the field was dominated by monetary crypto enthusiasts, while since 2017, technological crypto has become mainstream.
During the struggles of 2017-2018, much of it was about the monetary camp's pursuit of power and relevance. It is now clear that technological crypto dominates the zeitgeist.
There are still many people who view BTC primarily as an inflation hedge, but their proportion in media, social media, conference speeches, etc., is shrinking.
Monetary crypto enthusiasts mainly consider interest rates, central bank policies, etc., while technologists are more concerned with how to build projects.
As an inflation hedge, politicians/central banks will inevitably do things that are unfavorable to BTC. Whether it’s banning (or attempting to ban) or simply raising interest rates or taking other actions, these institutions will also take corresponding buying and selling actions, and the price of the BTC-USD trading pair will naturally respond.
Technologists generally do not care about these changes; they just want to create cool innovative projects. If the price of BTC-USD drops by 50% due to government actions, there is no real reason to affect what people are building or the stage investors in technological crypto.
Clearly, market prices will be driven by investor sentiment, but from the perspective of the SaaS bear market of 2018, did SaaS builders slow down? Did VC investments slow down?
Cryptocurrency may still be a bit early to truly enter the mainstream, but I think at this point, it no longer matters.
The train has left the station: all technological builders and investors believe that technological crypto has the potential to reshape business, finance, and the entire social structure, and they are willing to engage in discussions on this topic for years.
There is a large amount of capital that will never believe in BTC because they do not believe in non-productive assets; there is not a single investor in the world who does not believe that software will eat the world.
In the next approximately 5 years, every pool of capital around the world will buy cryptocurrency, and 100% of them will invest in technological crypto, but they will not all invest in monetary crypto.
That’s why I expect SOL and ETH to perform significantly better than BTC in the next "bear market." Technological funds do not care about macro; they just want to create what they believe will change the world.
A small portion of capital in the world is non-productive; fiat currency is about $100T, gold is about $10T, and public and private equity, debt, and real estate are at least 100 times larger than these.
The world actually does not care about non-productive assets; they want productive assets. When they understand cryptocurrency, they will buy productive assets that are much larger than non-productive products.
It can be said that SOL and ETH have no productivity, and they certainly differ significantly from stocks, debt, and real estate.
But I believe that the fact that everyone knows software is eating the world will lead them to buy SOL and ETH, even if they do not have the strict productivity of stocks/debt/RE.
We cannot ignore that the societal changes are too significant. Everyone wants to go long on the next wave of big technology, and crypto is undoubtedly one of them.
Yes, I do expect that BTC will be flipped in the medium term, and as the wave of technological funds enters the space, it will squeeze out macro funds.
Once BTC is flipped, the game for BTC is pretty much over. A large part of BTC's value pillar is that it is the largest and most liquid. Once these are no longer true, what it offers becomes less.
When people realize that this is becoming a reality, a large amount of money in BTC will flow out and into SOL and ETH as well as other more productive tokens.
Summary
1) The next bear market won't be like the last one.
2) Technological crypto is more likely to experience a shorter 2018 SaaS bear market (e.g., May to June 2021).
3) Decoupling is real.
4) Things get very interesting when BTC is flipped.
