Messari’s Ryan Selkis Speaks on Bitcoin and Altcoins Decoupling with Bloomberg Analysts
The Great Crypto Debate has been and gone, and with it comes a great number of projects showcasing use cases, and outspoken members of the industry vying to have their voices heard against members of centralized businesses who were, or are, otherwise detractors towards cryptocurrencies in general.
One of the debates that emerged was over the position of Bitcoin as a leader in the digital currency world. It's a title well deserved, considering that it's one of the most widely known in terms of the modest degree of public knowledge, it boasts the single largest market capitalization of any crypto, and remains one of the most commonly mined assets.
So, while its hegemony was assured yesteryear in bullish 2017 and bearish 2018, is it a trend that will continue from 2019 and beyond? There are experts that believe that digital currencies from 2019 onwards, will uncouple from Bitcoin, pulling at its suzerainty, while allowing companies to start applying other blockchain solutions, generating real-use cases in the process.
Ryan Selkis, Co-Founder of Messari believes that this will be a long-term trend:
“We've been looking for this de-coupling since the beginning of the year… What we'll most likely see is a longer-term decoupling, we saw this during the last bull run.”
Decoupling, in itself, is when two asset classes which were once identical in terms of asset value and performance become divergent.
Over the bullish years, such as 2013, this divergence happened, resulting in new assets and tokens emerging, spurring on new investment. What they lack however was survivability over the years.
“If you look at the bull run of 2013, and if you look at the top 10, 15, 20 from that run-up – almost all of them are gone. So these things to decouple over time.”
So when would this sort of divergence happen? It would need to happen during a bearish market under the right kind of climate, according to Selkis.
“I would argue that there would have to be a decoupling during a bearish market. Not while people are fearful [of investment] but when they are relatively apathetic.”
Selkis illustrates why this would need to come from a bearish market as opposed to a bullish one. And it comes down to the fact that bearish markets separate those that want to put these digital assets to work solving problems, from those that are simply interested in generating a profit.
“That way the only people using these assets are the power users, the one's building applications, and those that are looking for true utility.”
We already see several examples of these decoupled digital assets which are set to make some major waves in the market of 2019. These include TRON which, with the release of its mainnet, has exploded significantly, and is making major headway in the field of game development too.
TRON is closely followed by the likes of the Waves platform which offers a real-world solution to low transaction speed and poor scalability for companies looking for effective token creation and smart contract application.
The Bullish Future and the Speculative Past
A bearish market also has the further advantage of thinning the metaphorical herd, making it easier for a more clued up investor base to understand what separates a good project from a bad one.
With that in mind, it still doesn't change the fact that, as Selkis states, the average user doesn't know that game-changing fact off-hand.
“The entire company that we've built, Messari is structured to answer the question of how do you allow for people to become more knowledgeable about these digital assets, and actually look at their fundamentals beyond the price movements that you see on apps like CoinMarketCap.”
Mike McGlone of Bloomberg Intelligence sees this divide between speculative assets and those that have a more ingrained digital utility, highlighting the intrinsic value of things like Bitcoin.
“When you're in Argentina, for example, and you can leave the country with a great deal of your wealth on a thumb drive versus gold shoved into your pockets, that, to me is an advancement of technology.”
This is in stark contrast to the former, which are far more speculative and, as a result, suffer more from price movements, and dramatic volatility.
“Some of the other cryptos that we have are really not [in comparison to Bitcoin], they're more speculative, and in order to get that value, they have to operate more like assets such as Tether or LiteCoin where they can transact with very little volatility.”
The Killer dApp?
“The initial use case is still money” argues Selkis, and there are many that are inclined to agree. But where can blockchain provide the biggest impact? That would be in securing off-shore assets.
“If Bitcoin, or whatever kind of cryptocurrency is able to capture a quarter of offshore banking and emerging market fiat in currency reserves. This has the potential to make it a potential $10 billion dollar asset, so in some respects: that's a big opportunity.”