Monday, May 17, 2021

Bear market in cryptocurrencies may mean more focus on blockchain

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Naija247news, Nigeria
Naija247news is an investigative news platform that tracks news on Nigerian Economy, Business, Politics, Financial and Africa and Global Economy.
  • Several large cap cryptocurrencies have declined in 2018, but the underlying blockchain technology may offering risk rewards, says Brian Kelly.
  • “Last year was all about… ‘Hey, this guy’s building the new Facebook.’ I think this year is going to be about building the Ciscos,” he says.
  • Investors can use Cardano for smart contracts and blockchain technology, Kelly said.
Could this be the next cryptocurrency to breakout?  

The cryptocurrency bear market continues, with the biggest coins all taking a nosedive this year.

But as digital coins bottom out, the underlying blockchain technology offers surprising risk rewards, said Brian Kelly, founder and chief executive officer at BKCM LLC, an investment firm focused on digital currencies.

“Last year was all about the froth,” Kelly said of the overvaluation of assets like bitcoin. “And the promise of, ‘Hey, this guy’s building the new Facebook.’ I think this year is going to be about building the Ciscos,” the hedge fund manager said on CNBC’s “Fast Money” on Monday.

In fact, ripple and bitcoin cash have declined more than 70 percent in 2018. Bitcoin is down 48 percent, litecoin fell 47 percent and ethereum 44 percent lower since the start of the year.

“2018 is going to be the year of infrastructure and also the year of ethereum competitors,” Kelly said.

Kelly has said he has invested most of his own money in cryptocurrencies, “like 90 percent.” Still, the crypto trader said there are many risk rewards to using a platform like Cardano, which runs blockchain technology for the crypto Ada.

“It’s relatively new,” Kelly said. “You can do smart contracts on it. You can do blockchain 3.0. It’s an ethereum competitor in the year of ethereum competitors.”

Currently, Ada has a price at about 15 cents. But Kelly said cryptocurrencies have always fallen to lows during second quarter of each year, as far back as 2012.

“Where it’s selling at right now is a great risk reward,” Kelly said. “I want to look at names that are bottoming. That are competitors.”

In addition, Kelly said Cardano’s team of experts gives him confidence in the technology.

“Whenever you’re evaluating a cryptocurrency, you want to make sure you have very experienced people that know how to program,” Kelly said.

“I actually think there is room for plenty of different coins,” he said. “It really depends what’s being built on it. But you want to buy the infrastructure name… Maybe some have different specialties that other don’t. I think there is a place for them all to exist.”

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