Unchained Could the Crypto Markets Revive in 2023? Two Researchers Discuss - Ep. 439
Jan 3, 2023
Lucas Nuzzi, Head of R&D at CoinMetrics, shares insights on the future of the crypto market alongside Larry Cermak, VP of Research at The Block. They dissect the aftermath of the FTX collapse and potential contagion risks. Discussions include the challenges facing Bitcoin mining, why Miner Extractable Value (MEV) poses a threat to Ethereum, and the evolving role of stablecoin issuers in the current interest rate climate. They also examine market dynamics, calling for a shift towards long-term projects amid investor skepticism.
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Market Illiquidity
- The collapse of FTX and other firms significantly impacted crypto market liquidity.
- Reduced retail participation and credit availability contribute to this illiquidity.
Resilience of Lower-Quality Coins
- Some lower-quality coins like Tron, Ripple, BSV, and Ethereum Classic performed better than expected in 2022.
- Their resilience is likely due to strong retail communities supporting these projects.
Bearish Impact of Token Unlocks
- Token unlocks, where early investors sell their holdings, create bearish pressure in a bear market.
- Many VCs bought tokens at prices significantly lower than current prices, impacting current market dynamics.