Jonny Fry / James Tylee of Digital Bytes by Team Blockchain on Cyber.FM featuring Charlie Morris, CIO, ByteTree Asset Management
About this episode
Welcome to this week's Digital Bytes which has an analysis on the following topics:
Collapse of crypto price, reality or a buying opportunity - whether or not to ‘buy the dip’ cannot be answered in one word. There are many factors one needs to consider; potentially spreading the buying of volatile assets such as cryptocurrencies over a period of time to smooth out the price you pay can prove to be a lower-risk way to gain exposure. Cryptocurrencies remain a very risky volatile asset class and knowing when to buy and sell is often a matter of luck, not judgement, as sentiment often tends to be the biggest driver of prices.
Can Gresham’s Law help predict which crypto to buy? - there is a rather obscure economic law called “Gresham’s Law” and how it applies to blockchain networks. Simply put, Gresham’s Law states that “bad money drives out good”. Whilst this was previously used to explain the way in which those coins with high commodity value (value of the metal) would be taken out of circulation, a modified version of this law can be applied to explain how high value utility tokens will become increasingly scarce over time and how, conversely, lower value tokens will predominate as a medium of exchange.
Is pay to play really an effective business model? - the play-to-earn business model, a recent innovation in the gaming industry, gives gamers ownership over in-game assets and allows them to increase their value by actively playing the game. It avails users the opportunity to not only add value but also reap benefits.
Do not choose between gold and Bitcoin: own both - you don’t need much Bitcoin to make money when things are going well, but you do need quite a lot of gold. Moreover, it is highly unlikely that gold and Bitcoin will both be overvalued at the same time since they are naturally counter-cyclical. There is no need to choose between gold and Bitcoin, but to combine them for their strengths and weaknesses. This combination, on a risk-weighted basis, is a powerful idea and is the liquid alternative offering exposure to gold and Bitcoin.
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