Crypto trader and strategist Nicholas Merten reveals that he’s accumulating three decentralized finance (DeFi) assets in preparation for the next altcoin hype cycle.
In a new installment of DataDash, Merten tells his 404,000 subscribers that he believes the altcoin market is one catalyst away from igniting the next leg up.
“[Bitcoin] is over a trillion-dollar asset in valuation. This means that a lot of that liquidity can start to circulate to other cryptocurrencies and again play into the discussion of the secondary phase of the current cycle that we’re in… If you haven’t been seeing it through NFTs (non-fungible tokens), if you haven’t been seeing it through DeFi, if you haven’t been seeing it through oracles and all the other facets of the altcoins space, the optimism is here. It’s just waiting for that catalyst moment where some of the larger-cap plays really start to pop off.”
As a new altcoin season heats up, Merten says the first coin that he’s buying is decentralized exchange protocol Uniswap (UNI).
“Uniswap has a really unique position here when it comes out with Uniswap v3. If we have Uniswap v3 launching this month where you have features like single-sided liquidity where you can provide liquidity to a liquidity pair, any type of trading pair within its automated market maker, where you can provide your tokens and earn fees over time.
If you bring about layer-two scaling through optimism or optimistic rollups, where you’ll be able to reduce gas fees to practically nothing… If you have these two features here, you have the perfect storm to build a vortex of liquidity sucking into the Uniswap protocol to make it the ultimate exchange that the vast majority of users can use.”
The next coin on Merten’s list is Stacks (STX) which is a project that seeks to bring a killer use case to Bitcoin.
“The Stacks platform [is] going to create the ability for people to build smart contract-style applications on a secondary layer above the Bitcoin network… Not just focusing on payments but building out an actual framework to build applications like you see on Ethereum. So a Uniswap solid platform, the ability as well to build lending platforms and borrowing platforms that allow people to lend and exchange Bitcoin in a liquid fashion and use Bitcoin as real money in different types of programmatic functionalities.”
The last coin on Merten’s radar is Benchmark Protocol (MARK), which is an elastic stablecoin that adjusts its supply based on a basket of fiat currencies (Special Drawing Rights) as well as the volatility index (VIX).
“Instead of depending on just price here, it’s actually using a market index that measures traditional market volatility so that when there are periods of volatility in financial markets, there are more MARK in circulation or given to MARK holders to be able to provide more stable liquidity out there in the market.”
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