: title: Grayscale's Head of Research Zach Pandl: 'Bitcoin Will Retest All-Time Highs in the Coming Months'

Zach Pandl is head of research at Grayscale Investments, the world's largest crypto asset manager. In this discsussion, he provides an important perspective

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Secondly, I think there is a contrarian view on the smart contract platform market. Most people are looking at the total value locked in the Ethereum Layer 1 and Layer 2 ecosystems and concluding that there is no room for competitors. I think there is a more nuanced story there. I think there is value in the smart contract platform competitors. Most of them have their own design choices and it's going to take several years to fully determine which of those has the most effective design to bring in users, generate fee revenue, etc. But I think there are several that have established themselves as having a solid, well-functioning design. They're mature and tested enough that we think it is certainly a reasonable place for investors to look.

Lastly, I think there is a contrarian view on DeFi. The Biden administration is taking one approach to regulating this marketplace. And I think that it is holding back innovation and adoption given that approach. There were pros and cons, and of course, voters elected these officials to take this approach. So I understand where that's coming from, but I think the Biden administration’s approach to DeFi is holding the market segment back.output: Grayscale's Head of Research Zach Pandl discusses crypto, an unfolding growth scare, and why bitcoin's dominance could increase.

Zach Pandl, head of research at Grayscale Investments, the world's largest crypto asset manager, provides an important perspective on what to expect throughout the year. He also had some very interesting insights into the market dive that happened in August and whether something similar could happen again as the Fed tries to remove its restrictive posture on the economy. We also move into his thoughts on crypto, which assets are poised to outperform, and why others may struggle.

Forbes: Let's talk about the last month. In the beginning, there was the unwinding of the yen carry and panic in markets that followed for about a week. Then markets rebounded. How do you process all that?

Pandl: It was a volatile month, but it really needs to be divided into two periods. One from the end of July to August 5, which was a period of growth scare. Then the period from August 6 to the present, which was a kind of recovery. Most major asset classes declined, but many of them ended up approximately where we were when we started the month. Now some things declined and didn't fully recover, including carry trade strategies in currency markets–which was a big focus for investors at the start of the month–Japanese stocks and Ethereum.

Then, there were some things that performed well in early August and then continued to perform well in the second part of the month. Those were bond markets, high-quality bonds as a whole, like U.S. Treasuries and closely related assets, and non-dollar currencies. So the yen, Swiss franc, euro and British pound had gains during the month. The lasting themes, I think, coming out of a volatile August are lower rates and dollar weakness. I think that has implications for Bitcoin in the months ahead.

Forbes: Do you think this scare was a one-off or will the market experience something similar if it gets spooked again?

Pandl: I'd like to say first that I feel fairly strongly that the focus on events in Japan and the yen is a bit of a red herring when we're looking at what happened in markets at the beginning of August. Japan is a challenging subject even for professional macro investors, and I think often the source of confusion. What I think really happened was a true growth scare. There were a few pieces of U.S. economic data that caused that, but the most important was the increase in the unemployment rate in the first week of August. The U.S. unemployment rate has now increased by a magnitude that has never occurred outside the context of recessions. This is something that economists call the Sahm rule after economist Claudia Sahm, who labeled that statistical regularity. That doesn't mean we necessarily will have a recession, but the data are telling us that we are seeing some of the statistical regularities like an inverted yield curve and a rising unemployment rate that are consistent with recession.

Mengapa ia mempunyai kesan yang begitu besar pada pasaran ialah pendaratan lembut merupakan konsensus yang sangat kuat sebelum bulan ini. Terdapat kebimbangan mengenai kemelesetan pada tahun lepas, tetapi ekonomi bertahan dengan baik dan oleh itu ia menjadi konsensus yang meningkat dan harga yang semakin meningkat ke dalam pasaran bahawa pendaratan mudah terjamin. Oleh itu, peningkatan kadar pengangguran meningkatkan kemungkinan kemelesetan semula yang dilihat bagi banyak pelabur. Ia akan mengambil masa beberapa bulan untuk melihat data untuk memastikan pasaran buruh tidak semakin merosot. Walau bagaimanapun, beberapa perkara yang berlaku dalam pasaran adalah mengejutkan, terutamanya dalam turun naik ekuiti. Indeks VIX meningkat ke tahap yang dikaitkan dengan peristiwa pasaran yang sangat melampau pada masa lalu seperti Covid, krisis kewangan 2008 dan kebankrapan Lehman Brothers. Itu mungkin memberitahu kita sesuatu tentang struktur mikro pasaran—

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