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Sergey Nazarov of Chainlink Says Why He Thinks Bull Market Can Last

Last Updated March 4, 2024 12:26 PM
Teuta Franjkovic
Last Updated March 4, 2024 12:26 PM
By Teuta Franjkovic
Verified by Peter Henn

Key Takeaways

  • Sergey Nazarov emphasized the introduction of spot crypto ETFs in the US as a critical development.
  • He highlighted the role of net new buyers, especially from the global financial system, as pivotal.
  • The Chainlink co-founder sees the adoption of spot crypto ETFs as the beginning of further market expansion.

Sergey Nazarov, Chainlink’s co-founder, spoke  about why spot crypto ETFs were a major milestone for the cryptocurrency sector.

He highlighted  Bitcoin’s recent peak, the highest since the autumn of 2021, signaling a potential shift from a prolonged bear market to a more bullish trend in an interview with Bloomberg.

Nazarov Discusses the Impact of Crypto ETFs on Market Trends

Nazarov said “net new buyers,” particularly from the global financial system, were force behind the current market cycle.

According to Nazarov, the launch of spot Bitcoin ETFs in the US represents a milestone. It offers the global financial system access to investment and payment channels that are both comfortable and familiar. As a result, it makes entering the crypto market easier.

Potential Market Expansion Through Spot Crypto ETFs

Sergey Nazarov views the introduction of spot Bitcoin ETFs in the US as a pivotal development that paves the way for cryptocurrencies to tap into a significantly larger market. He anticipates that this could lead to a considerable influx of capital not only into spot Bitcoin ETFs but also into other spot cryptocurrency ETFs.

Nazarov regards this as merely the initial phase, foreseeing the next step to involve the tokenization of assets. He suggests that banks, observing the capital flows into these spot ETFs, might develop competing assets or strategies to attract some of this investment. This, in turn, would mar a transformative period in the integration of traditional finance with the cryptocurrency sector.

Nazarov explained that, historically, new buyers have been the catalysts for increased adoption and the cycling of market trends. He emphasized the importance of identifying who these new buyers are in the current cycle. He also pointed out that the new buyers come from the global financial system—a significantly large group of new entrants.

Nazarov also reasoned that, by examining the expansion of the market through vehicles like ETFs and applying basic calculations, even conservative estimates reveal a potential for substantial value influx not just into Bitcoin ETFs but also into other cryptocurrency ETFs. Nazarov believes this is only the start, as the next phase involves asset tokenization. He predicts banks could develop assets to either compete with ETFs or to capture some of this capital.

Spot Crypto ETFs as Milestone in Crypto Adoption

Sergey Nazarov views the advent of spot crypto ETF products in the Us as the star of a significant phase in cryptocurrency adoption. He interprets this as an indication that leading asset managers, including the industry giant BlackRock, have developed a comfortable understanding of cryptocurrencies and their regulatory environment. This has also enabled them to create sophisticated financial products centered on cryptocurrencies. Nazarov suggested this was unthinkable five years ago.

The co-founder of Chainlink further pointed out that this development opens up cryptocurrency to an extremely large market. Indeed, the size of this market might be underestimated by the average consumer.  Nazarov anticipated this expanded access could facilitate the integration of the global financial market with cryptocurrency and blockchain technology in ways that have not been seen before.

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