Cryptocurrencies Avalanche (CRYPTO:AVAX), The Graph (CRYPTO:GRT), and Shiba Inu (CRYPTO:SHIB) serve very different functions, yet they’ve all seen big moves lately. Crypto-focused Fool contributor Chris MacDonald and The Motley Fool’s Eric Bleeker discuss what they believe is behind the price action in these cryptocurrencies on this episode of “The Crypto Show” from Backstage Pass, recorded on Nov. 10.
Eric Bleeker: Movers and shakers, Avalanche near the top of the list at 31 percent the past week. The Graph up 22 percent.
If you’re a member of Digital Explorers, we released The Graph research on Friday. You should be able to have access to that, just go into– it’s one of our watchlist stocks. You should be able to read about The Graph, get more on that project.
Then Shiba Inu down 18 percent after boiling over.
Chris, does anything catch your eye here? Obviously with Avalanche, a lot of people looking for innovation in layer 1 solutions. And The Graph, this is maybe some excitement picking up around Web3.
Chris MacDonald: Yeah. Avalanche, I think, is interesting right now, it’s one of the bigger movers.
There are a couple of things that I’ve been watching with Avalanche. They launched, or they recently announced a $200 million Blizzard fund. What they’re trying to do with that is to grow their ecosystem in the DeFi space, various NFT projects, stuff like that. The hope is that increased adoption in use cases on top of the Avalanche protocol will be a driver of value for this cryptocurrency.
Then on top of that, I was recently reading that Grayscale had announced that they’re looking at Avalanche for a potential one of their digital asset products. That could be a big driver.
I think what’s happening right now, investors are trying to get ahead of this news and buy in. There’s what’s known as the Coinbase (NASDAQ:COIN) effect when a token is listed on Coinbase. But Grayscale, there’s a lot of money there.
Capital flows make the difference for various tokens and investors often want to front run that. Maybe they’re moving some money out of more speculative stuff like Shiba Inu right now, which probably makes sense to take some profits at some point. Especially if you’re an investor who got in at a fraction of where it is right now.
Bleeker: Yeah, I received some nastygrams from some Shiba holders. [laughs] They don’t like some comments around dog-based cryptocurrencies being worth billions.
I think our main focus here isn’t to obviously denigrate anything, but we are looking for coins with real utility and technology that we feel has growth. We just don’t look at that side of the market as much.
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