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Wall Street investment firm Bernstein last week listed seven predictions that could limit cryptocurrency growth.
1. . The Ethereum Merge Succeeds
Bernstein analysts Gautam Chhugani and Manas Agrawal wrote in a note last week that although the move to PoS to maintain its network from PoW is only a few days away. . They believe it will happen from September 10 to September 20 and it will be a positive catalyst for cryptocurrencies.
2. Rollups bring wave of demand from crypto users
Chhugani and Agrawal said there has been a significant increase in the number of users, on-chain liquidity, and transactions on systems such as Optimism and Arbitrum, with trading activity accounting for around 15%-25% of all transactions on the Ethereum blockchain. Rollups is a layer 2 Ethereum platform that processes transactions separately from the main network to increase speed and reduce costs.
3. Ether topples Bitcoin as the leading cryptocurrency
The question most asked by investors is when the Market Cap of Ether (ETH) will overtake Bitcoin (BTC). For digital assets, it is more important that it becomes a “structural, innovation-driven trend rather than a macroeconomic asset class.” Ether represents this “innovative cryptocurrency”, and if it succeeds in building a blockchain digital economy, ETH can be used as a digital currency.
4. Rollups bring “DeFi summer”
Analysts said the summer of 2020 was the first “DeFi summer,” but since then, the decentralized finance sector has underperformed Tier 1 chains. However, layer 2 scalability is now making DeFi affordable again, Bernstein analysts wrote, noting that the Uniswap exchange currently receives about 10% of its fees from the roll-up.
5. NFTs revolve around gaming and Play-to-earn become play-to-own
Bernstein’s team said: “Crypto games will have their own unique culture. Chhugani and Agrawal are seeing a major shift in talent for Web3 game development from traditional gaming studios – a leading and powerful indicator.
6. Token designs began to focus on value accumulation
“More sustainable token designs will offer retail benefits in investing in application tokens over fast blockchains or the latest retail memes,” the analysts wrote.
7. Fat Protocol Becomes Fat Application Thesis
The “Thesis on the Fat Protocol” suggests that value in blockchains will accumulate at the base protocol layer, rather than at the application layer. Bernstein said app tokens will grow thanks to enhanced scalability, economical transaction costs, better user growth, improved accumulated token value, and retail interest rates for investing in the applications they use.
