Eric Ervin, the CEO of cryptocurrency and blockchain investment firm Blockforce Capital, has recently argued that the crypto market sell-off is “actually healthy” for the ecosystem as it allows it to focus on those building new applications.
During an interview with Bloomberg, Ervin noted that his firm looks at the market in the long-term, as this is “almost a venture asset class,” in which every move should be considered to have an impact in a “minimum of three years.”
He added, however, that given the amount of inefficiencies in the market and the amount of risks to be solved, there are various opportunities for investors who’ll be willing to wait. The potential reward, he said, “presents a nice opportunity” if investments are done “in the right way.”
Bitcoin's Sell-Off Is 'Actually Healthy'
He was then asked how the nearly year-long bitcoin bear market, which has seen the cryptocurrency’s price all from a near $20,000 all-time high to about $3,420 at press time, has been impacting the firm’s strategy.
Notably, Ervin revealed Blockforce Capital is “actually growing” into the bear market. He added:
We think this is actually healthy. This really just takes us back to where we were in March or June of 2016 – about eighteen months ago – we had this big run-up and then this big blow-off, and now we have real people in the space building technology, building those on-ramps.
He noted that on bitcoin alone Blockforce Capital’s system is up year-to-date, using a strategy that doesn’t take short positions but only stays in cash or goes long. Per his words, there are very few markets where a similar strategy can be pulled off efficiently.
Ervin added that the cryptocurrency ecosystem, despite the sell-off, presents various similar opportunities, even “in arbitrage across different exchanges.” He noted that to take advantage of these opportunities, investors may need to be “a bit more sophisticated.”
He was then asked about the firm’s Ethereum Classic (ETC) recommendations, as the cryptocurrency is now down about 91% from its $46 all-time high. It’s currently trading at about $3.9, after falling 0.5% in the last 24-hour period.
I think Ethereum Classic is one of those satellite positions. So you stick with your Core positions of ripple, bitcoin, ethereum, litecoin – those top 6 cryptocurrencies. And you start to play around with some of these other projects. There’s a lot of really bright developers who’ve stayed with the Ethereum Classic chain.
Per his words, investors will want to stay with where the developer talent is. He noted that Ethereum currently has a lot of developer talent, but that “it’s open-source so you can just fork any changes added to Ethereum and add them to the Ethereum Classic chain.”
Essentially, he argued ETC has some of the advantages ETH has while being cheaper and not facing the clogging issues currently affecting the Ethereum network. As for a bitcoin ETF, he said he believes one will be approved next year, but not in February.