Key Takeaways
- • Grayscale head of research Zach Pandl says Ethereum, Solana and BNB Chain "are not a consensus trade" among crypto-native investors, who are instead focused on Zcash and Hyperliquid.
- • Pandl argues trillions of dollars in assets will move on-chain, and that nearly all of this activity will require a smart contract platform, including tokenized real-world assets, stablecoins and tokenized bank deposits.
- • Grayscale estimates Bitcoin bottomed near $58,000 at the end of June, and believes recent resilience, despite a Fed rate hike, rising long-term yields and the failure of the CLARITY Act, shows crypto was oversold over the summer.
- • Pandl does not expect another Fed rate hike this month, though one more increase in December is possible, and says Bitcoin can absorb one to three small hikes.
- • Grayscale sees perpetual futures becoming a standard instrument for institutional and retail traders, citing its Hyperliquid ETF for US investors, with regulatory questions around hedging and carry trades still open and CFTC progress credited.
Summary
Grayscale's head of research, Zach Pandl, said Ethereum, Solana and BNB Chain "are not a consensus trade" among crypto-native investors, who have been chasing privacy token Zcash and decentralized perpetuals exchange Hyperliquid. Pandl's advice to investors was "don't sleep on the classics," arguing the larger opportunity lies in large smart contract networks that he described as having "an absolute key role to play in a crypto portfolio."
Pandl's thesis rests on the expectation that trillions of dollars in traditional finance assets will move on-chain, and that almost all of this activity will need a smart contract platform, including tokenized real-world assets, stablecoins and tokenized bank deposits. He said many crypto-native investors are buying privacy tokens and revenue-generating projects while overlooking core infrastructure.
On Zcash, which Grayscale offers investment products for, Pandl retained a positive view and expects it to keep gaining share among privacy-focused currencies. He argued that financial privacy is something crypto must now import from traditional finance, and expects privacy tools to spread to smart contract platforms, stablecoins and perpetual futures markets. He called privacy "a huge part of the next cycle." On Hyperliquid, Pandl said perpetual futures will become a standard instrument for institutional and retail traders, pointing to Grayscale's Hyperliquid ETF for US investors as evidence of demand. He said open regulatory questions remain over whether firms can use these platforms to hedge balance sheets or run carry trades, and credited the CFTC with progress on those rules.
On the broader market, Grayscale estimates Bitcoin bottomed near $58,000 at the end of June. Pandl said prices have recovered despite the Federal Reserve raising rates, long-term bond yields climbing and the CLARITY Act failing to pass, which he read as a sign crypto was oversold over the summer. He said institutional clients buying Bitcoin and Ethereum ETFs still view them as long-term portfolio diversifiers. Pandl linked part of the summer sell-off to pressure on Stretch (STRC), the preferred product issued by Strategy, which peaked around Bitcoin's late-June low; as STRC has moved back toward its $100 target price, he said concern about tail risks has eased.
On monetary policy, Pandl does not expect another Fed rate hike this month, calling a pre-election hike "a bit bold," though one more increase in December is possible. He said Bitcoin can absorb one to three small hikes, since nothing approaching the 500 basis points of tightening in 2022 and 2023 is expected. He attributed higher interest rates to heavy borrowing by both the government and private companies funding the AI buildout.
Pandl's thesis rests on the expectation that trillions of dollars in traditional finance assets will move on-chain, and that almost all of this activity will need a smart contract platform, including tokenized real-world assets, stablecoins and tokenized bank deposits. He said many crypto-native investors are buying privacy tokens and revenue-generating projects while overlooking core infrastructure.
On Zcash, which Grayscale offers investment products for, Pandl retained a positive view and expects it to keep gaining share among privacy-focused currencies. He argued that financial privacy is something crypto must now import from traditional finance, and expects privacy tools to spread to smart contract platforms, stablecoins and perpetual futures markets. He called privacy "a huge part of the next cycle." On Hyperliquid, Pandl said perpetual futures will become a standard instrument for institutional and retail traders, pointing to Grayscale's Hyperliquid ETF for US investors as evidence of demand. He said open regulatory questions remain over whether firms can use these platforms to hedge balance sheets or run carry trades, and credited the CFTC with progress on those rules.
On the broader market, Grayscale estimates Bitcoin bottomed near $58,000 at the end of June. Pandl said prices have recovered despite the Federal Reserve raising rates, long-term bond yields climbing and the CLARITY Act failing to pass, which he read as a sign crypto was oversold over the summer. He said institutional clients buying Bitcoin and Ethereum ETFs still view them as long-term portfolio diversifiers. Pandl linked part of the summer sell-off to pressure on Stretch (STRC), the preferred product issued by Strategy, which peaked around Bitcoin's late-June low; as STRC has moved back toward its $100 target price, he said concern about tail risks has eased.
On monetary policy, Pandl does not expect another Fed rate hike this month, calling a pre-election hike "a bit bold," though one more increase in December is possible. He said Bitcoin can absorb one to three small hikes, since nothing approaching the 500 basis points of tightening in 2022 and 2023 is expected. He attributed higher interest rates to heavy borrowing by both the government and private companies funding the AI buildout.
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