Ben Lilly Past, Present and Future

2022 is coming to an end. NewsBTC staff decided to launch this crypto holiday special to provide perspective on the crypto industry. We speak to several guests to understand the highs and lows of cryptocurrencies this year.

In the spirit of Charles Dicken’s classic A Christmas Carol, we look at cryptocurrency from different angles, see its possible trajectory towards 2023, and explore the different industries that could underpin the future of finance. Find common ground in views.

Ben Lilly: “(…) Regarding the fundamentals… nothing has changed. If anything, builders are building faster than ever. I know it’s going to be a tough week and it’s a blessing for anyone who can get through such a bearish period.”

And now, as a bonus round, we spoke with co-founder Ben Lilly. Jarvis Labs, An on-chain analytics and token design company that tracks the crypto market. Lily provided his take on the current state of the industry, why the bear market should be used as a time to build, and why the early classes have matured. This is what he told us:

Q: What are the most important differences for the cryptocurrency market today compared to Christmas 2021? Has it changed? Are penetration and liquidity declining? Are the fundamentals still valid?

A: In December 2021, we were discussing whether the US Federal Reserve would hike rates in the face of bubble inflation. A year later what we see is a strategic push where they say take two steps and instead take three in a hawkish/bearish way. , and ensured that the market could not find a solid foundation to build momentum.

This thinking led to the rapid hiking regime. The downwind effect was the dollar as the currency is an asset held. And almost everything else has lost value against the dollar.

Many people like to say that Bitcoin, Ethereum, and other assets have “lost their value.” This is a misnomer. We priced things in US dollars and compared to the dollar, these assets have lost a significant amount of value.

What many people are slowly realizing is that most participants in the crypto market are and have been speculators. And there are things that we want to track better with data.

A drop in speculators (and many market makers closing their stores) has left a big hole in liquidity. we know this very well. It is very difficult for market makers to operate smoothly on second tier exchanges as the books are quite dry. We understand this very well when we started. Clients are demanding market making more than ever, so our team has started ramping up these operations for 2023. .

As for the fundamentals… nothing has changed. If anything, builders are building faster than ever. We veterans all know that this is the most productive week in cryptocurrency. A blessing for those who can survive such a bearish period. I see some very impressive technology solutions coming to fruition. Our team is currently testing some of them and aims to expand their on-chain capabilities in the coming months. For us, this is proof that the industry fundamentals are getting better.

Q: What is the dominant narrative driving this shift in market conditions, and what should be the narrative today? What do many people overlook? We have seen massive crypto exchange failures, hedge funds that were considered unruly, and ecosystems that promised a financial utopia. Are cryptocurrencies still the future of finance, or should the community pursue a new vision?

A: Operations that happen on-chain are more desirable than they used to be. Our clients are pushing us in this direction. I love hearing this and hope to push everything we do to be fully on-chain in the next few years.

Put like this, I never imagined that our team would be looking at zero-knowledge technology to do some of their work. It has been made. This process continues to happen as the years go by.

Q: If you had to pick one, what do you think will be the key moment for cryptocurrency in 2022, and will the industry feel the impact during 2023? Where will the industry be next Christmas? Do you think it will survive this winter? Mainstream is once again declaring the death of the industry. Will they finally get it right?

A: The key moment was when GBTC slid into negative NAV.

As the tide receded in 2022, we learned what was really going on in the crypto waters and saw many explosions stemming from Grayscale Trust products.

Three Arrows Capital, Genesis, DCG, BlockFi, Voyager, etc. were all tied to trusts, and as the value of trusts exceeded the value of all outstanding shares (minus NAV), market dynamics weakened spot demand. rice field. April 2021.

The timing of this and what the US Federal Reserve did with its rate hike was like a double-edged sword with both edges pointed in the same direction. Higher interest rates and lower spot demand from toxic grayscale products meant the bear market sword was cut in two.

As for 2023, I think the worst is yet to come. We are not necessarily talking about price here. I’m talking about businesses that don’t have enough cash to survive the winter. Revenues are declining and new entrants to cryptocurrency are declining. I think this is good in a way because it keeps badly run businesses out of the industry, but it will also cause some headline scares in the industry as companies close their doors.

From my point of view, it will not be the end of the industry. Those with capital have enough runways. And even if you don’t have a multi-year runway, you’re staffed by very passionate builders. By the end of 2023, the market will be back in full swing. I never believe it will be a full blown bull market…it will be about projects rolling out what they have been busy building this year. Let the build do the work and the results are amazing.

Q: And of course we have to ask. Many argue that the collapse of FTX has sent the industry back to his 2018 bear market. Back in the days of Initial Coin Offerings (ICOs), the so-called “Wild Wild West” era of cryptocurrencies, what do you think of this idea and where do you think the industry stands now? Crucially, what is Jarvis’ role in this context and where are his goals for 2023 and beyond?

A: Cryptocurrencies are maturing just like we are all getting older. If you ask anyone who’s gone through ups and downs if they’re back to their youthful selves, most will tell you they’re far wiser. Crypto is the same.

We have previously discussed the ever-increasing demand for on-chain solutions, but the industry has struggled with centralized entities like FTX.

Space gets smarter as you move forward. And we hope Jarvis Labs can help push this thinking. Our team keeps busy in many areas. We have a team that builds software solutions, new metrics, dashboards, token designs, algorithms, and a few others that will be announced soon. But if he has to keep it to one role, it’s to help everyone hold crypto to a higher standard. we can do better. Get better.