The Cryptonews team is reporting live from the Blockchain Economy London Summit that's running from 27-28 February 2023.Cryptonews had an opportunity to sit down with Lex Sokolin, the Chief Cryptoeconomics Officer at ConsenSys, to talk about a variety of topics, including current market trends, crypto regulation, and also the much-anticipated MetaMask airdrop.What Factors are Driving the Crypto Market Right Now?Cryptonews asked Lex about the recent trends in the crypto market and what factors are driving them. Lex emphasized the importance of looking at macro trends and the interconnection between various asset classes. Lex noted that crypto is now considered just another risk asset class, with its performance tied to that of other risky assets – when risk assets do well, crypto does well. Lex explained that over the last year, there had been a big blowup in Terra Luna, which hit every asset manager and custodial service that had exposure to it. This resulted in lower trust in custodial services and perhaps greater trust in decentralized solutions and increased regulatory action. Lex highlighted that the market drivers now include the likelihood of entering a recession, which impacts discretionary spending and connects to how many NFTs people buy. Lex also mentioned other drivers, such as Ethereum's ability to stake and unstake with the Ethereum Shanghai upgrade, Bitcoin's ability to have NFTs, and fundamental progress in the technology, which reinforces the strength of the technology story. Finally, Lex touched on the regulatory challenges in the crypto market, which continue to be difficult and will take some time to become more clear.The Collapse in Prices is a Repricing, Not a Major ConcernLex Sokolin discussed the potential timing of the next crypto bull market in relation to the current high-interest rate environment. Sokolin suggested that just because the next bull market may be years away, it doesn't mean that cryptocurrencies and blockchain technology are not valuable. Rather, it is just a reflection of the current economic cycle valuing them lower. Sokolin pointed to Amazon and Netflix as examples of companies that survived through a period of undervaluation and became more valuable later.Despite the collapse in prices, Sokolin notes that crypto has been surprisingly resilient and has remained relatively flat since the market crash. He suggests that this represents a repricing of the entire market, with both tokens and tech companies going from 50x revenue to 5x revenue. To snap out of this period of undervaluation, Sokolin argues that there are two things that need to happen: fundamental secular adoption and a different market regime.Sokolin believes that fundamental secular adoption will occur over time as more people begin to use Web3 services and there is increased utility in blockchain applications. As for a different market regime, Sokolin advises against trying to predict when this will occur as it can lead to frustration. Overall, Sokolin remains optimistic about the future of crypto and believes that surviving through this current period of undervaluation can lead to significant value in the long term.Will MetaMask Do an Airdrop?When asked about a potential MetaMask airdrop, Lex Sokolin smirked and answered that ConsenSys has been exploring 'all the different ways of decentralizing and tokenizing our various products and initiatives'. Notably, Sokolin explained that it is a delicate balance for a company like ConsenSys, which has a significant footprint, to ensure that its key infrastructure persists well, as so many people rely on it. From an analysis and modeling perspective, the team has looked at lots of different permutations, and ‘it’s in the spirit of the company to continue in that direction'.Finally, Lex added that given the systemic importance of MetaMask, they have to be careful about what they can do and when.Lex's ambiguous response is likely to sustain and even intensify ongoing speculation about a potential airdrop, given that he did not outright deny the possibility.
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