Chains.com is a platform focused on building radically user-friendly products for earning, trading, spending, and accumulating cryptocurrency. The platform is designed to help users engage with blockchain-enabled products such as NFTs, DeFi, CEX and more without the need to interact with the underlying technology.
This innovative platform just introduced its new token, CHA, which is designed to provide users with various benefits within the Chains.com ecosystem. We talk to Anderson Mccutcheon, crypto expert, and Founder/CEO at Chains.com
E-Crypto News
1. How will the crypto market be affected by the steep rate hikes by major
central banks around the world?
The rate hikes have effectively made money more expensive to acquire. Debt became more expensive, meaning there is less leverage and less capital to deploy into everything, including growth assets.
After years of extremely cheap credit that allowed businesses and funds to grow fast, generate massive returns and constantly seek to further diversify their assets, the increase in rates demands institutional investors to operate more cautiously, and retail investors may cash out altogether, as the price of debt increases.
This causes a reduction in “buy pressure”, which is essential for the price of cryptocurrencies to increase. With less buy pressure and increased sell pressure, we will see leveraged positions get liquidated or decreased in quick succession. Most of these effects have already happened, however, and we saw multiple crypto-focused funds and companies exit the market, one way or another.
2. Is the Crypto market recession-proof?
From a technological perspective, there are portions of the market that are recession-proof. With over 10,000 active cryptocurrencies, it’s important to understand that there is almost no way to paint the entire market as either fragile or recession-proof, as all these assets exist on a spectrum of fragility. Bitcoin and Ethereum are the most antifragile.
3. Why is bitcoin not yet hedged against inflation?
It is, as long as you look at the fundamentals-based value and not the speculative value. It is easy to articulate the fundamentals-driven case for a $15,000 bitcoin. However, Bitcoin is also a highly liquid asset with an entire ecosystem of derivatives, leverage, ETFs and various other tools that drive fluctuations in its value.
Bitcoin that is trading at $68,000+ per BTC at normal inflation rates and at high leverage and then correcting to $20,000 is not an indication that Bitcoin is not a great digital inflation-hedge asset.
4. What is the main link between crypto markets and inflation?
There are two major forces at work during inflation.
A) It takes more of the same currency to buy anything, including Bitcoin.
B) Inflation causes debt and leverage to be more expensive, reducing equity multiples and the percentage of capital deployed into growth / higher risk assets.
Force A drives the price of Bitcoin up, as the buying power of USD decreases. Force B drives the price of Bitcoin down, as there is less USD to allocate to assets such as Bitcoin. If force A is greater than force B, the price of Bitcoin goes up.
5. Where do you see the NFT market in the next 5 years?
I think that utility-based NFTs such as domains and music IP rights and other tangible, valuable assets will outgrow the current market stage, which is almost entirely focused on images of little artistic value and utility.
6. When will the volatility in the Crypto market tone down or will it
continue in the long term?
I think the cryptocurrency market will remain volatile as long as regulation allows it to be. Sophisticated 24/7 markets are supposed to be volatile, as there are so many tools to play the market and take advantage of the other players. Only regulation can stifle and stabilize the market.
7. Will the Metaverse help in propelling the Gaming world to greater heights?
No. We have had the Metaverse for 20 years now. The people who gravitate towards the Metaverse are people who fail at the universe.
8. Which is better and why: Central Bank issued digital currency or corporate and DAO-driven cryptocurrencies?
Central Bank Digital Currencies are likely to be inevitable. They provide central banks and government entities with perfect mechanisms of control, monitoring, and taxation. If you are a government looking to control your citizens and economy better, there is no better tool.
Corporate cryptocurrencies are more dangerous, as a currency issued by Facebook for instance will effectively create an economy of close to 3 Billion people, entirely for the purpose of enriching Facebook stockholders. Such an economy is very likely to be a global power that will have more leverage than most democracies.
DAO-driven cryptocurrencies are effectively a democratisation of money and I think are essential if we were ever to develop into a multi-planetary species. Providing groups with more autonomy and agency of their currency is essential for a truly free market.
