With the cryptocurrency market in freefall, investors and funds are looking for utility-based projects that provide real-world value. Companies building despite market conditions continue to develop, grow and support the entire ecosystem. The utility can come in many different shapes and sizes, although the utility desperately needed throughout the industry is infrastructure.
Established companies need simple ways to get involved in the space, and real solutions to problems that have not been solved yet. The world’s biggest brands lose millions of dollars to automated bots during online drops, are constantly fighting fraud and struggle to streamline their inventories across different retailers. All of these problems can be solved using smart contract NFT technology while entering Web3 presents a great opportunity to further monetize and brand build.
I interviewed Cyrus Taghehchian, Founder and CEO of SHOPX today to get his opinion on the recent market volatility, Bitcoin and Ripple. SHOPX is a full suite of tools helping onboard brands into the Web3 space by solving real-world problems using smart contract NFT technology.
Q: Why are companies still investing in Bitcoin?
A: Well, for one thing, they are treating it as a capital reserve asset. That follows what companies like Microstrategy have been doing in the past. The most prescient folks don’t rely on this core holding for cash on hand. They are long on Bitcoin, just like the many individual traders who the community would colloquially call “hodlers” or “diamondhands.”
Q: How do you look at a cryptocurrency cutting its value in half and still find that prior purchase to be viable?
A: You certainly don’t want to suffer from having rose-colored glasses. However, again, if you are taking a long position, you’re able to ride out those that are created by things like anxiety and temporary market conditions. It helps to see BTC not as a payment medium or a typical investment asset, but really, as a store of capital.
By the way, we are seeing Bitcoin prices stabilize, to an extent, around $23,000, and Etherum remains at around $1600. We might see the kind of crawl that happened a few years ago with Bitcoin hovering around $6500 for months, but we’re not likely to ever see $6500 again.
Or we might see price increases coming, with things like Federal Reserve interest rate hikes and rampant inflation.
Q: Bitcoin is supposed to be a hedge against inflation, isn’t it?
A: That’s right – one of its biggest selling points is that it’s untethered from whatever the Fed is doing at a particular time. You have to remember, too, that more than a few traders also came into Bitcoin from a battered equity market, where stocks were getting bruised big time and the Dow was losing unprecedented value.
And then there’s Ripple…
Q: What’s the significance of ripple?
A: To me, it represents how regulation plays a role in coin and token prices. So you have to bake that in.
The SEC has been at war with Ripple for many months now over the ludicrous idea that XRP is a security. The legislature is holding hearings, and the matter is winding its way through the court, but there’s evidence that the SEC is going to lose this particular battle, and Gary Gensler isn’t speaking for the cameras. In a win, you might see XRP take its prior place at the table again, and although it’s at around 35 cents right now, it probably won’t be if they beat this.
As an example of regulatory overreach, you have some parties suggesting the SEC should also go after any exchange that listed XRP at all. That’s what I mean – lawmakers will probably ultimately see this kind of enforcement to be flawed.
Q: What about the exchanges themselves?
A: That’s a good question. Look, people are suggesting that all of these exchanges are going to go out of business. But take FTX, for example. Their recent move with BlockFi, and before that, their support for Voyager, both show a level of financial solvency and it seems like they’re still interested in their plan to underwrite a sports stadium.
Those are good signs, too.
Q: What are the coins to watch right now?
That’s different for each trader, but in a way, the biggest and most prominent blockchains are going to determine a lot about how the market goes. Then you have big increases with Ethereum classic which is something a lot of people are keeping an eye on. And you have developing coins like Cardano and Litecoin that might be useful in tomorrow’s blockchain economy.
In the end, there’s some consensus around the idea that some sort of blockchain asset is going to be integral in building tomorrow’s web3 transaction models. The question is: which coin or coins is it going to be?