- Arrington Capital execs point to two crucial catalysts in the market.
- Until then, they're not exiting any positions.
Altcoins, cryptocurrencies beyond Bitcoin, are suddenly top of mind.
After Bitcoin broke a record high on Thursday, investors are now focusing on the rest of the crypto market.
But investors looking to cash out on their holdings still need to hold out a little longer.
“It’s been a pretty anaemic cycle,” Ravi Kaza, Arrington Capital’s newly appointed CIO, told DL News. “We’re still pretty early days, outside of Bitcoin.”
Ethereum, the second-largest cryptocurrency on the market, is still a whopping 45% from its record of $4,878, according to CoinGecko. Likewise, Solana is down 36% from its all-time high set in January.
That also means Arrington Capital, which boasts a portfolio of over 100 cryptocurrency projects, won’t be liquidating any positions — yet.
“They can run a lot more,” Colton Conley, a new partner at the venture firm, told DL News, referring to the company’s portfolio companies. “We really want to see a big move in altcoins before we even consider taking chips off the table.”
Ravi Kaza, Arrington Capital’s newly appointed chief investment officer, highlights two key events that will kick off the next rally in the market.
The Federal Reserve needs to cut interest rates again. If that doesn’t happen, the central bank needs to buy government bonds to inject more cash into the market, otherwise called quantitative easing.
“It’s tough for altcoins to work relative to Bitcoin when the Fed is not in an easing bias,” he said.
Kaza, who previously worked as a managing director at Stanley Druckenmiller’s Duquesne Capital Management, pointed to the rallies in September when the central bank began cutting rates, pushing the broader crypto market higher.
The CIO also highlighted new crypto regulations winding their way through the US House and Senate.
Senators advanced landmark stablecoin legislation on Monday, which would provide clear rules for issuers of dollar-pegged cryptocurrencies, and is now moving for a final vote.
If it becomes law, some crypto executives say the niche will enjoy a 10-fold rise.
Likewise, a slew of funds and asset managers have filed droves of various spot altcoin exchange-traded funds under a more reconciliatory Securities and Exchange Commission.
“The regulatory change is far more impactful for altcoins than it is for Bitcoin,” said Kaza.
“Bitcoin had the clearest regulatory picture going into the election, whereas a lot of this other stuff did not.”
Liam Kelly is a Berlin-based reporter for DL News. Got a tip? Email him at liam@dlnews.com.