Is it possible that people are ‘underestimating’ Bitcoin and Ethereum?

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The latest market slump has shifted many people’s perceptions on Bitcoin. Consider this: between April and May, the values of BTC and ETH fell by 60%, while DeFi assets fell by 70%. As a result, many retail traders have begun to wonder, “Is this the end of the bull run?” Will it meet the positive price forecasts of many analysts?

Vance Spencer, co-founder of Framework Ventures, was quick to recognise this, saying:


“NO, I don’t think this is the end of the bull run. I actually have trouble defining what a bull run is in crypto. I think there’s a bull run in any given time or place”

He also included an intriguing point about Bitcoin and Ethereum. Concerning the former, he believed that Bitcoin had a 10-year adoption cycle that would continue. While for ETH, he emphasised that it is still in its early stages, so volatility and drawdowns are unavoidable.

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According to Spencer, the market has massively underestimated the amount of cash that is poised to leave institutional investor circles. He stated, ”

“The resounding sense that I get is that people are underestimating the amount of capital that’s coming off the sidelines by probably 1 to 2 orders of magnitude,” Spencer said.

Ethereum and Bitcoin are the two cryptos that are of prime interest for large investors and are both no where “near a top”.

He further added:

“Ethereum has a lot more to be told in a world where there is not hyperinflation or there are not all these crazy things happening than [bitcoin’s story]. It’s very difficult to look at ETH even DeFi through cynical lense. You have to be optimistic.”

Looking at the ETH/BTC ratio, one can see that it tripled in the last 6 months.

Source: Bloomberg

ETH 2.0 upgrade should also play a major role in expanding decentralized finance (DeFi). Right now, many institutions are probably aware of the opportunities present in Defi but may be hesitant to jump into it. Spencer added:

“The innovation cycle in DeFi is happening in real-time.”

How far can DeFi reach?

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Vance Spencer forecasted the expansion of decentralised finance (DeFi); presently valued at $40 billion, he claimed that it might ‘add another zero in a year from now.’

Here’s what he forecasted over the next one to three years:

“In the next 2 years, we’ll get around $100billion. Afterwhich, we’ll see an acceleration from 100 to 500 to a trillion mark.”

Source: Walletinvestor


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