Crypto will continue to oscillate between a range in the near term due to the uncertain global macroeconomic environment, rising inflation and interest rates, according to Edul Patel, CEO and co-founder of global algorithm-based crypto investment platform Mudrex. In an interaction with Business Today, he said that uncertainty takes money out from riskier assets and the same has been seen in the global stock markets also in the recent past.
"We look at crypto as a long-term investment tool like 10 years or 20 years," Patel said. Of late, the overall market capitalisation of crypto plunged to around $1 trillion from the $3 trillion hit in November last year.
Commenting on the risk-reward ratio in cryptos, Patel said there are no free lunches in the financial world. If something is giving you high returns, then there is likely an inherent risk behind it.
“Expecting that you will only get returns without understanding risk is the absolute wrong thing. And that is what most people don't intuitively understand," he said.
While sharing his views on the crypto startups, Patel said, "We have seen businesses that keep innovating thrive amid uncertainty and succeed in bringing a fundamental shift in the ecosystem. Crypto and blockchain are relatively very new spheres of modern finance. Both of these technologies are going to stay in the longer run. The continuous urge by different players to keep innovating in this space is inspiring.”
On asking about a couple of cryptos has gone out of the game in the recent past and why founders of crypto exchanges are moving out of India, Patel added that only strong investment options will stay. "I think that’s been a cycle for every single consolidating phase across every single industry," he said adding that 95 per cent of crypto founders whom he knew for the last four years are still in India.
He further added that truth is far away from the hype. “I think people usually look for more favourable jurisdictions with better taxation policies. The same thing is happening in the crypto space. More jurisdictions are opening up that are building out better and better regulatory systems and that are attractive to certain businesses, certain founders, certain people, and that is why they might choose to move out and so on," said the Bengaluru-based entrepreneur who has over 3 lakh investors on his platform.
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