Crypto for Advisors: The Hidden Mechanics Behind This Crypto Rally
Main Idea
The article discusses the 'flywheel effect' in the crypto market, driven by ETFs, IPOs, and stablecoins, which creates positive feedback loops accelerating market growth, while also noting potential risks when the cycle reverses.
Key Points
1. The 'flywheel effect' in crypto is driven by ETFs, IPOs, and stablecoins, creating positive feedback loops that boost market growth.
2. Ether ETFs have seen over $6 billion in inflows, with ETH gaining 50% in July, and the Ether-to-bitcoin price ratio breaking its 200-day moving average.
3. Stablecoin issuers like Tether reinvest profits, further fueling demand for stablecoins and crypto assets.
4. Successful IPOs, such as Circle's, are encouraging other companies like Grayscale and Gemini to file for public listings, expanding crypto's inclusion in traditional portfolios.
5. The article warns that market cycles are inevitable, and the current flywheel effect could reverse, as seen during the dot-com crash, potentially cooling the market.
Description
In today's Crypto for Advisors newsletter, Alex Tapscott , explains the flywheel effect, and it’s impact on the crypto markets. Then, Natalie Hirsch from Polymath answers questions about questions about investing in public crypto companies in Ask an Expert. Thank you to our sponsor of this week's newsletter, Grayscale. For financial advisors: register for the upcoming Minneapolis event on September 18th. Unknown block type "divider", specify a component for it in the `components.types` option Th...
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