Arthur Cheong, a veteran crypto investor and CEO of DeFiance Capital, believes that the era of deep drawdowns and multi-year bear markets for digital assets may be coming to an end. He suggests that the crypto market may be entering a new phase where digital assets behave more like the stock market, with complex secular growth patterns instead of extreme swings. Cheong points to the post-2008 Great Financial Crisis period in the S&P 500 as an example of this potential shift in the crypto market.
According to Cheong, if his thesis proves to be true, future bull markets in the crypto space will no longer benefit all altcoins equally. He predicts that most altcoins will not experience the massive rallies seen in previous cycles, highlighting that only a few winners will deliver significant returns similar to Nvidia’s success story. This shift would mean that investors need to be selective in choosing altcoins to invest in, as not all assets will be successful in the evolving market environment.
Cheong emphasizes the importance of altcoins creating their own paths to success in the crypto market. He suggests that the market’s trajectory is not predetermined and is influenced by factors such as mass adoption. Cheong poses a hypothetical scenario where a platform like Telegram successfully onboards a large portion of their user base onto their TON platform, hinting at the potential impact such developments could have on the value of altcoins. This underscores the need for altcoins to innovate and differentiate themselves to thrive in the evolving market landscape.
Despite the uncertainties in the crypto market, Cheong remains optimistic about the future prospects of Bitcoin and Ethereum. He believes that both assets are undervalued, considering they are the only two digital assets without regulatory uncertainties. Cheong points out that Bitcoin and Ethereum are attractive to Traditional Finance (TradFi) demand, suggesting that they may be viewed more favorably by institutional investors seeking regulated assets. This sentiment aligns with recent developments, such as the conclusion of the SEC’s investigation into Ethereum 2.0 by blockchain development company Consensys.
Overall, Cheong’s insights highlight a potential shift in the crypto market towards a more mature and stable environment, akin to the stock market. With a focus on complex secular growth patterns and the need for altcoins to differentiate themselves, investors may need to adapt to a changing landscape in the digital asset space. By recognizing the evolving dynamics and potential opportunities in the market, investors can position themselves to navigate the challenges and uncertainties in the crypto space while capitalizing on the potential for growth and innovation in the future.
