Cryptos like Bitcoin, Ethereum, XRP will recover… but here are the terms & conditions

The crypto ecosystem boasts of more than 4,500 different cryptocurrencies and choosing a few coins/tokens to trade or hodl might seem a daunting task, especially at a time when the crypto market is undergoing a correction phase. Every cryptocurrency operates in a different ecosystem and, at times, it becomes important to consider each one as a separate asset.

Bitcoin, Ethereum, XRP, Cardano, just to name a few, have different underlying technologies and purposes. Commenting on how to choose the right asset, Brian Brooks, CEO of Binance US said,

“It’s really about “understanding” what is this network going to do. If you believe financial apps are going to go online, the you’ll probably buy the ETH token because you think Ethereum will be the platform to those financial apps. If you believe decentralized cloud storage is the future, you’ll probably buy Filecoin etc. etc.”

“Fungible tangible internet money” is the most common connotation that is attached to cryptocurrencies. But according to Brooks, people need to be educated beyond that because of the “real value” that these assets have. Nonetheless, cryptos have been trading like a “risk asset” over the past few days. Assessing the market situation, the exec said,

“In reality, most cryptos aren’t risk assets. Bitcoin is really “the risk asset” and has risen a lot in the last 12 months because of the inflationary issue.”

Post the pandemic, the whole world, and the U.S. in particular, is in a macro de-risking environment, thanks to inflation and international tensions. The “uncertainty” in the bigger environment that sustains the crypto ecosystem, has ultimately made people shed their risk assets and has been one of the main reasons for the market’s volatility. Commenting on the same, Brooks said,

“Crypto will recover, but you’ll have volatility along the way for sure.”

Brooks further emphasized that exchanges like Binance intended to enhance the long-term adoption rate of the ecosystem. He added,

“We’re here to incubate the foundational technology of crypto… The adoption rate of cryptos depends on how much confidence people have in the networks that back the value of the tokens. That’s what needs to come next.”

There are currently 1,647 cryptocurrencies that have already been forgotten by this world. Some tokens that are doing well today might cease to exist and become “dead coins” in the future. Cautioning investors, Brooks concluded,

“We have to accept and be comfortable with that. The value of the token is based on your predictions of which ones are going to emerge as the winners [in the long run].”