Many cryptocurrency enthusiasts are looking past Bitcoin in search of other coins that could potentially offer a higher return on investment (ROI). After witnessing the huge rise in altcoins during the 2017 bull run fueled by ICO’s, investors and speculators alike are thinking about what would be the best way to mobilize their money. During the ’90s, AOL was a huge leader in the internet space and slowly lost market share to other competitors; Bitcoin used to have over 90% of the total crypto market share. The case for Bitcoin is it has the highest market cap, highest institutional presence with liquidity, and it is the most well-recognized cryptocurrency ever created. The current price of $11,800 per BTC with a market cap of $218 billion is incredible and a true show of how mathematical money can be a success. But, for BTC to go 10x the market cap needs to hit $2.1 trillion at a coin price of $118,000 per BTC. That enormous rise in price could very well happen over time but with futures and derivatives on the price of Bitcoin, sell pressure from big institutions can plummet the price as we saw in early 2018. Many coins exist that do not have derivatives to put sell pressure and are gaining in liquidity on UniSwap V2. In my opinion, these coins are more interesting because there is no way to short the price. In a certain way, anyone can be a Venture Capitalist with a couple of hundred dollars and receive a small portion of equity. The decentralized pool of UniSwap V2 allows anyone across the world with the internet to get their piece of a coin that could be in early stages similar to a Series A or Series B funding round. Historically small investors could never get access to entities with these kinds of valuations and had to wait until there is an offering on an exchange. The democratization of crypto is truly on display with UniSwap V2.
I have been watching this rollercoaster for the entire summer with UniSwap V2. Today, at one point it was reported at $294 million liquidity. The Ethereum decentralized ecosystem is utilizing this app and creating an enormous liquidity pool for all types of tokens. Many of these tokens do not have derivatives thus there exists less sell pressure on the price. For a token to go 10x, or “moon”, the buy-side pressure on the market needs to overpower the sell-side pressure and by a lot! That is how the price goes up just like we saw in 2017 for pretty much every coin/ token. Looking at the trend for UniSwap V2, in my opinion, we could see the app hit $1 billion in liquidity within the next couple of years conservatively. People all around the world are looking for some sort of exposure to crypto and are confused/ don’t know what the process is from start to finish. UniSwap V2 is this bridge allowing the small investors to easily access liquidity on tokens that main exchanges like Coinbase or Kraken do not have listed. Tokens that have less overall sell pressure, lower total market caps, and are early in their development.
March 11 Kraken reports 770k ETH were traded on the large red candle above. Even during the 2017 bull run, there was never this much buying or selling of ETH because there was not as good liquidity. This stress test on March 11 shows the strength at the bottom of ETH and the price has over 4x since. This shows ETH as an asset class held up to extreme selling, and since has had a fantastic rise in price action. People have said so many times these assets will “go to 0”. In the history of cryptocurrency, we have never seen as much volume as we saw in March 2020. The overall market is up hundreds of percent since the bear market in March 2020. With the US dollar reaching record levels of debt, math-based currencies are going to be sought after by the average consumer. I am no financial advisor, this is all opinion and I do have a stake in BSOV.