Noelle Acheson, Head of Market Insights at Genesis Trading, joins Yahoo Finance to discuss the latest in cryptocurrency and NFTs.
Video Transcript
SEANA SMITH: Bitcoin not moving a heck of a lot today, although under a slight pressure just above 48,000. But we got some strong words from billionaire investor John Paulson. He was saying that cryptocurrencies, that they are eventually going to be, quote, “worthless”. So let’s talk about this and Noelle Acheson. She’s the head of market insights at Genesis Trading. And Noelle, it’s good to see you. The crypto, it has its fair share of skeptics. We know a lot of people have had pretty choice words when it comes to cryptocurrencies and whether or not they are a smart investment.
But what do you think the crypto market, what do you think investors are making of the comments that we got from John Paulson today?
NOELLE ACHESON: Well first of all, I must say I do respect his way with words that crypto is a limited supply of nothing. That made a lot of us chuckle. It wasn’t a surprise, Seana. We know that there are some institutional investors, traditional investors, that share this line of thinking. Then we also have investors with very strong reputations such as [INAUDIBLE] Jones, Stanley Drunkenmiller, Bill Miller, and many more who have a different view of the role that crypto assets can play on the macro stage. And what [INAUDIBLE] on the potential use cases and eventual acceptance.
But that’s what makes a market, different viewpoints. I should caveat that anything I say is my opinion, not that of my employer. And nothing I say is investment advice. But it’s always interesting for those of us working in this industry to try to see through the eyes of the skeptics. It helps us reaffirm our thesis for being in this industry. And one thing that Mr. Paulson said, I don’t want to put words in his mouth, but this is something that bears quite a lot more thinking. And that is crypto doesn’t have any intrinsic value. Now what does that mean?
Again, not putting words into his mouth. I understood it to mean that it’s not backed by anything physical, such as gold or silver. But what is these days? I mean technology is a significant part of most portfolios. Now that isn’t, and fiat currency isn’t. And these very important asset groups are, much like Bitcoin for example, backed by use cases, networks, social consensus, if you will. Are they intrinsic? Do they have value? So maybe the whole concept of intrinsic value needs a new look.
– Noelle, and that’s a great segue into the question that I was going to ask, which is about the $1.3 million NFT of a rock. Obviously the NFT market has been getting a lot of attention. But as you mentioned, I mean, is any of that truly emblematic of a bubble in crypto assets? Or is this just kind of a part of the nuances of art collecting? The value that you place on that Jamieson’s sign behind you might not be the value that I place on it because it’s subjective. What is the big story when it comes to the explosion of NFTs that we’ve seen as of late?
NOELLE ACHESON: That’s a wonderful question, Brian. And I’m chuckling because we don’t actually really know. Sure it’s chaotic. I think we answer to your question is actually it’s both. Yes, there are some bubble aspects to this. But there’s also fundamental shift of how we understand value, how we engage with each other, how we exchange, how we engage with culture, how brands are engaging with their clients, how athletes, musicians, any kind of creative artists can start to grow his or her community. It’s a fascinating shift in the paradigm of how we invest our time.
And this ties in very, say, messily with the shift that we’re seeing in the social norms. It started pre-pandemic. The pandemic certainly accelerated with young people, not so young people also, spending more time indoors, not by choice, spending more time on their phones, communicating with each other through digital artifacts that have a value. If we don’t understand the fundamentals, much like I hinted at earlier, that we don’t have the fundamental doesn’t mean that they don’t have value, doesn’t mean that they’re not around to stay.
Sure, they may be– [INAUDIBLE] $2 million we even saw for a JPD of a rock that is different from others because of the shade that is used. Yes, I’m scratching heads there. But it’s emblematic of the change in the way of thinking of how we express ourselves. I am fascinated to see where this goes. I think it’s only just getting started.
SEANA SMITH: Noelle taking a look at Bitcoin, because you pointed this out in your note, Bitcoin now only represents just over 40% of the total crypto market cap. That’s down from 70% at the start of this year. Is this a shift that you expect to stick? And I guess, what are people favoring instead?
NOELLE ACHESON: That’s a fascinating question. Yes, I do think it is a shift that I expect to stick. And while obviously my personal opinion is that Bitcoin has quite a ways to run still, we’re seeing some data that points to that, that doesn’t mean that it shouldn’t decline in terms of market. Wait, what we’re seeing is the growth of the rest of the market. That is a very healthy sign, a very positive sign for the entire ecosystem because they all tend to build on each other as well.
We’re seeing huge growth in other layer ones. Layer ones are what we call the base blockchains. And then you have all sorts of applications on top of them. But the base blockchains, different types of base blockchains, are exploding in value. Some of them have performance so far this year of over 5,000%, which is kind of hard to get your head around, isn’t it? What it says is that people are experimenting much more widely than Bitcoin, that Bitcoin is no longer the only on ramp for institutional investors into this space. And that’s a very healthy diversification.
– And Noelle, lastly here. I want to ask about Cardano. This has been getting a lot of attention as well. It’s a decentralized blockchain platform that was actually built by the co-founder of Ethereum. ADA I believe is a digital token that’s on there. That’s been getting a lot of attention as well. So should we expect to see this as part of a larger trend for more types of technology to continue to come out, but also gain a lot of traction as well? Because it seemed like some people were saying for the longest time that maybe we had seen the peak of the new types of technologies that people wanted to invest in.
NOELLE ACHESON: That’s a very good point, Brian. Thank you so much for raising it. Yes, this is a sign of the trend that we’re seeing that what does peak even mean? Maybe some things will rise in popularity and decline in popularity. But what we know, what we’ve seen is that the innovation has not stopped. The funding has not stopped. Even during the last bear market, which I have not seen in previous bear markets, funding into this industry in terms of market infrastructure players, in terms of protocols, that didn’t stop. It accelerated in fact. And the innovation again, just the technological experience and knowledge that we’re gaining from these new protocols being tweaked, being experimented on with serious amounts of value moving online in fact.
That’s really exciting. We have to remember, Brian, also that these are new technologies. Those of us that have been working in the industry for a while may feel that Bitcoin is seriously old. But it’s not. It’s only 12 years old, which in the arc of things is a tiny amount of time. And some of the newer ones like Cardano, which hasn’t really even launched its smart contract capacity yet. Very, very new. Ethereum is also going through some fundamental changes, one of the most ambitious technological experiments in life while it’s going on [INAUDIBLE] that I’ve ever seen.
And just what we’re learning from all of this is that it’s priceless.
SEANA SMITH: Noelle Acheson, head of market insights at Genesis Trading, always great to get your perspective. Thanks so much for joining us today.
