Dogecoin rallying as much as 20% shortly after news that Elon Musk and Twitter had struck
a deal for the outspoken Tesla CEO to buy the social media platform.
The meme coin, which has been in and out of the crypto top ten over the last few days,
has repeatedly been hyped by the Tesla and SpaceX founder.
How will, not just Dogecoin, but the rest of the altcoin universe move the markets?
Let's get in the views from Benjamin Stani of Matrixport, a crypto financial services
company serving both institutional and individual investors.
It's great to have you with us, Benjamin.
Good morning.
Thanks.
Benjamin to kick it off, Dogecoin has been called people's crypto by Musk.
He's publicly said that doge could be used to make payments for Twitter services.
Tesla already accepts doge for some services.
How do you see the Musk dogecoin story shape up?
For me, a doge is the ultimate meme coin.
It was created in 2013.
That's almost ten years ago now as a joke.
And then a few years later, the founders even abandoned the project.
It became almost forgotten until about a year ago when we had that whole Wall Street bad
saga.
And retail was betting big on meme stocks like GameStop and AMC.
And actually some of them made big money.
I think after that they turned into crypto, that Reddit crowd and they were looking for
memes there to.
So I believe it was around that time when Elon also took notice.
And I think he liked what he was what he was seeing at Wallstreetbets because of his experience
with short sellers at Tesla stock and his relationship with the SEC.
It was also at that time when Elon flip flopped on Bitcoin, first adopting it for Tesla's
balance sheet and then a couple of weeks later raising environmental concerns about the proof
of work energy consumption.
Ironically, doge is also still on the proof of work standard, but I think that's another
story.
So I guess it's a long winded answer, but I believe that Elon likes doge because it's
a joke and he publicly said multiple times that history loves irony.
So I think he just wants to turn doge into something.
And when the richest man in the world wants to throw money at something in our nascent
industry, that might actually just work out.
Talking about other coins.
Now if you look at the investment flow data from CoinShares, ETH has been grappling with
net outflows for the last three weeks, bringing up the total so far for this year to almost
US$170 million.
What explains this?
That's a good question because if you look at the developments on the Ethereum network,
these types of flows might actually surprise you.
I was at the developer conference in Amsterdam two weeks ago and I can tell you there certainly
nobody was talking bearish.
Everyone was excited about the upcoming proof of stake transition and the progress they
were making on Layer two Scaling solutions.
One of the prominent deltas even recently announced token drop.
And so at Matrixport, we're also seeing demand for staking increasing.
And we've never recently launched a leveraged staking product that offers a significant
uptick versus the regular staking yield.
But of course, you can't deny the numbers that you've just given me.
And I think it makes sense to dissect who might be behind these flows.
Taking a step back, I think what we've seen over the past couple of weeks is immense pressure
on the equity markets, particularly the US tech stocks.
And at the same time we've also seen correlation between nest egg and crypto reaching new all
time highs.
So I believe these outflows might just be asset managers that are just cutting their
so-called exposure to risky assets.
Basically, they're moving money out of crypto.
But its loss has led to money flowing into all coins like Avalanche, Solana and Terra.
So is this a reflection of shifting power balance in the crypto world?
Are we moving away from the dominance of Bitcoin and ether.
The flows that you've just mentioned?
I would guess probably more from crypto native funds and these types of funds are still fastly
growing because we're very early and I'm a firm believer that the future is going to
be multichain.
So we at Matrixport, we support that, that multi-chain world and we're expanding our
product offering.
We're continuing to launch a dual currency product for altcoins and we've integrated
eight EVM chains in that DeFi custody already and going to have Solana and Luna support
soon as well.
So I guess the answer to your question is twofold.
I think multi asset managers are going to likely stick with the major ones, Bitcoin
and Ethereum for the near term.
But I think the growing breed of new crypto funds, they're going to cast their net much
wider and will be embracing new, wider range of coins and projects.
Benjamin, thank you so much for joining in with your insights today.
Thank you very much for your time.