The altcoins are seeing major interest, with Ethereum and Cardano blasting higher at a much faster rate than Bitcoin.
Like many things in the crypto markets, there aren’t many fundamental drivers to look at when it comes to price action, but newer blockchain platforms that offer more functionality may be more attractive as time goes on.
To be sure, NFTs are driving both use and interest in blockchain technology, and Ethereum has become the epicenter of the NFT market.
While Cardano and Binance Chain, among others, offer some advantages over the current Ethereum network, the NFT actions seems to be concentrated on Ethereum.
Now, the potential of these blockchain systems is beginning to be understood by a wider audience. When the ERC-721 protocol hit the market, few considered that it could be used to create NFTs that would be worth tens of millions of dollars.
Altcoin Use Cases Will Grow From Here
The dev tools that Ethereum spearheaded have been adopted, or expanded on in numerous blockchain platforms. It is pretty fair to assume that there are more use cases for decentralized platforms coming to market, especially as the world continues to pivot to an online existence.
Use of the physical world has been more or less prohibited by heavy-handed government policies globally. While these moves toward what looks more and more like global martial law will have long-term ramifications, in the medium-term, it is a great time to be operating in the online space.
One area that is almost guaranteed to grow from here is blockchain-based gaming. While traditional gaming companies didn’t want to make in-game items redeemable for cash – the exact opposite is true in the blockchain gaming space.
With the rise of NFTs as an asset class, it is simple to understand how these decentralized tools may usher in an online ecosystem that while gamified, popularized decentralized assets in a way that Bitcoin never could.
The Game of Life
It is easy to write off decentralized assets as a fad – or be even more dismissive of the interest they have attracted over the past few years.
Michael O’Rourke, chief market strategist at JonesTrading, told Bloomberg,
“With all of this money floating around, we should not be surprised that there are people paying exorbitant amounts of money for digital pet rocks and an endless amount of other digital assets that can be easily created…The space is dominated by younger generations, he said, and all they know is a Federal Reserve that’s been almost-perpetually accommodative.”
There are a few interesting ideas in that quote – with perhaps the most important being that anyone who is younger has only known accommodative central bank policy.
In short – this means that an entire generation has seen a bad economy that central planners have tried to paper over with cheap credit – and then cheap money.
One may consider the fact that this isn’t a glowing endorsement of the current financial system – or social structure – which may end up being a large problem as time goes on.
The assumption that many people in the legacy financial system make, mistakenly, is that it can somehow be saved. There is no way out for a system that keeps creating more debt and worthless fiat currency, and the current ramp in inflation is proof of that.
Of course, it is true that people can’t eat in-game items – or ETH. The same is true of gold, which has been widely accepted as money since people created the idea of history.