A popular analyst says he spotted a revealing correlation between a pair of crypto assets and XRP.
Former Adaptive Capital partner Willy Woo says it’s clear that Chainlink (LINK) and Cardano (ADA) tracked the epic XRP crash last week with higher correlation than any other cryptocurrency.
According to Woo, the price movements suggest traders believe the two projects may one day face regulatory challenges like those of XRP.
“Chainlink and Cardano [are] most closely correlated with XRP.
This is not a full backtrace situation … It is a two day trend which means traders are clustering XRP regulatory fears the most on these two coins.
Woo says it will be a bumpy ride for the altcoin market following the SEC’s regulatory action against Ripple.
he said The emergence of Bitcoin as a strong store of value is the first step on a long road towards the emergence of a fully fleshed out crypto ecosystem that includes legitimate altcoin-based platforms.
“… This is probably a good time to post a discussion thread on the future of altcoins. And where its place can be in the domination of crypto-caps.
Reserve of value buckets (very roughly speaking):
$ 12 trillion gold
$ 90 trillion Fiat
$ 100 trillion in stocks
$ 100 trillion in bonds
$ 250 trillion real estate
Derivatives = $ 1000 trillion +
Derivatives encompass the buying, selling and passing on of risk. The modern world is made possible by them.
Do you want insurance for your home? Do you want food that farmers will grow? What about financing your first business? Derivatives allow the risk market to enable these activities for you. They use collateral in the form of a store of value to operate.
Decentralized finance (DeFi) in its current form is an experimental area in which we find out how to build networks to buy, sell and pass risk. In order for this to happen, the underlying networks will need to pull the value of their market cap to use as collateral. “
Woo says Bitcoin’s dominance could gradually increase to one-third of the total market cap of all cryptocurrencies as strong crypto projects emerge and become established over time.
“In the traditional world, it’s a 2: 1 ratio between derivatives and store of value. This would translate into a 33% dominance of BTC. The first thing to build is a store of value, which is why BTC’s dominance has been so high. It is possible that this will continue a downtrend towards 33%.
We are currently in a phase of eliminating legitimate experience security scams, ponzis and fraud. The ride will be jerky.
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