- Bitcoin’s dominance of the crypto market will fade as proof-of-stake tokens gain ground, FTX.US boss Brett Harrison said.
- Those tokens have become popular as alternatives to bitcoin’s proof-of-work system, seen as environmentally harmful.
- Harrison, president of FTX.US, noted investment is pouring into crypto even after the recent sell-off.
Bitcoin’s dominance in cryptocurrencies will dwindle as tokens using a proof-of-stake system eat away at its market share, FTX.US boss Brett Harrison has predicted.
Bitcoin’s grip is loosening as the likes of ethereum’s native token ether and altcoins such as solana gain ground, according to the president of the US affiliate of FTX, the world’s second-largest bitcoin exchange.
“Market moves coming from bitcoin have been going down steadily over time. Assets like ether, other alternatives assets like solana, and these other coins are all picking up in terms of total market cap ,” Harrison said on “Squawk Box” on Monday.
“Over time, we’re just going to see less and less of the total market share come from just one asset, from bitcoin alone,” he said.
Bitcoin made up about 42.5% of the market capitalization of all crypto assets on Monday, according to data from CoinMarketCap, compared with almost 70% at the start of 2021. Second-place ether’s share was 18.3% on Monday.
The size of bitcoin’s market cap peaked at $1,156.49 trillion in October last year, according to Statista data, after US securities regulators approved a bitcoin exchange-traded fund.
Throughout 2021, proof-of-stake cryptocurrencies grew in popularity as users looked for alternatives to bitcoin’s proof-of-work model.
In a proof-of-work system, high-powered computers compete to solve cryptographic puzzles to be able to create new coins. Critics say the huge amounts of computing power and energy needed make this harmful to the environment.
With a proof-of-stake approach — as used to create solana’s sol and cardano’s ada — people put forward their current holdings as a kind of down payment, and this allows them to mine coins. That saves on energy, comparatively, meaning it is likely to be greener.
Asked about the outlook for cryptos, Harrison noted that the last couple of months have seen a slowdown in the prices, money is still pouring into the industry.
“What we’re seeing, especially on the crypto side, is that the private markets are booming, and people are investing a ton into this space,” he said.
“Shark Tank” investor Mark Cuban is among those on the hunt for crypto-related opportunities. He has said he is looking to invest in a crypto application with mass appeal, equivalent to Instagram.
Meanwhile, venture capitalists such as Andreessen Horowitz have stepped up investment in crypto projects. In January, sports star Tom Brady’s NFT platform raised $170 million from Andreessen Horowitz, Kleiner Perkins, and a16z alum Katie Haun.
FTX.US is part of Sam Bankman-Fried’s international cryptocurrency exchange FTX. It plans to soon become the first US-based company to offer crypto derivatives, after investing in the space by acquiring LedgerX in August.
Given that, Harrison declined to offer any price or market action outlook for bitcoin or other cryptocurrencies. But he did tell CNBC he was less concerned than most about the prospect of conflict between Russia and Ukraine.
“I think there’s a lot of short-term anxiety with what’s going on between Russia and Ukraine,” he said.