Crypto Adoption Picks Up Momentum as Market Sentiment Changes
VYSYN Weekly Release #108: Crypto mainstream adoption underway as demand rises
Several top cryptocurrencies have rallied over the past few weeks as the crypto market gradually recovers from the recent price correction. Some market analysts believe the latest rally indicates that the industry will enter a new bullish cycle in the coming months.
While many crypto market participants focus on the short-term losses incurred during the latest crash, industry experts are more concerned with the long-term. With weak projects and hands eliminated, the industry has more room to grow and thrive, driving mainstream adoption.
The latest edition of the VYSYN Release will highlight positive developments within the crypto market as investors' sentiments change. We will also analyze what is in store for the crypto industry as the market matures.
Interest in Bitcoin surges as market sentiments change
A lot has changed in the crypto market over the past month, all weighing in on the market's performance. One of them is a big change in one of the most trusted market indicators. The Moving Average Convergence Divergence (MACD) is a trend-based momentum indicator that portrays the relationship between two moving averages of an asset. It is often used to point out reversals. The indicator comprises two lines that portray a 12-day Exponential Moving Average (EMA) and 26-day EMA.
For the better part of the past three months, since the crypto market debacle started, these two lines have been on a downtrend. However, over the past two weeks, the metric saw a significant change as both intercepted and separated to form a bullish divergence. Notably, this bullish trend has continued as both EMAs recovered from a bearish convergence and the MACD is still on an upward trajectory.
Over the past few weeks, the crypto industry has attempted to regain its footing, with several coins making major comebacks. The apex coin, Bitcoin, is currently enjoying notable price increases along with other cryptocurrencies in the market. The market continues to recover, with Bitcoin hovering above the $23,000 mark.
In addition to the increase in Bitcoin's price, the number of wallet addresses holding at least 1 BTC has jumped by approximately 40,000 over the past three months. According to data from Look Into Bitcoin, there are currently over 890,000 Bitcoin wallets with more than 1 BTC, indicating that long-term investors are loading up on the digital asset. As the market matures, these investors increase their BTC holdings despite market conditions.
(Source: Look Into Bitcoin)
The crypto market is much healthier after $2 trillion correction
With the crypto market gradually recovering from the $2 trillion correction, several industry experts believe that crash was healthy for the market. According to these experts, the bearish market conditions exposed weak projects relying on the hype surrounding bull markets to thrive.
Alan Vey, the founder and CEO of the Ethereum layer-2 scalability protocol Aventus, said, "Think of it like medicine: hard to swallow in the short term, but good for you in the long term. It will weed out the projects with poor fundamentals, who were relying on hype among the media and an inflated market to carry them [along.]"
With these weak projects out of the way, developers will focus more on building projects with robust fundamentals. This allows the market to mature, pushing the entire industry towards mainstream adoption.
In a recent interview with CNBC Squawk Box, Changpeng Zhao, the CEO of Binance said, "The crash weeds out a lot of the weak players in the industry… Now we see people who are building new applications are staying in the industry. The investors in the industry now have a long-term view. I actually think that the industry is much healthier now than when it was at an all-time high."
Mainstream crypto adoption continues unabated
As the market continues to evolve, the crypto industry is anticipating greater adoption with more people seeing the digital asset sector as a hedge against inflation. Earlier last week, the Brazilian challenger bank, Nubank, announced that it has reached 1 million cryptocurrency customers.
The Warren Buffet-backed bank reached this milestone less than a month after launching its crypto offering at the end of June. Nubank's CEO and co-founder David Vélez acknowledged the bank had expected to reach 1 million crypto users in one year. However, with the popularity of crypto assets and the increasing demand, the bank reached that milestone in just three weeks.
While the industry is witnessing an influx of users, a recent report reveals that crypto is still in the beginning stages of its adoption. The joint report published by Boston Consulting Group, Bitget, and Foresight Ventures highlighted that crypto adoption is still very low compared with traditional investment assets.
As per the report, only 0.3% of individual wealth is currently held in crypto assets, which is insignificant compared with the 25% invested in equities. The report also compared the internet’s adoption curve with current cryptocurrency holders, estimating crypto to reach 1 billion users in 2030.
(Source: Boston Consulting Group, Bitget, and Foresight Ventures)
The report concluded that the low level of crypto investment is a sign that there is still a lot of room for more growth and adoption. The demand for cryptocurrencies is surging as investors seek alternative assets to hedge against inflation. More institutions are investing in the asset class and financial service providers are making it available to their clients.
At present, it is difficult to predict what factor could drive Bitcoin and crypto to the next phase of their development. Nonetheless, the crypto market is more mature this time around, with developers building several innovative decentralized applications. More countries are adopting frameworks that allow for the regulation of cryptocurrencies rather than outright banning them. Various sectors of the crypto industry, including the gaming and Metaverse sectors, are witnessing increasing growth. The entire industry is moving in a positive direction, setting the stage for increased global adoption.
About VYSYN Ventures
VYSYN Ventures is a longstanding venture capital company that specializes in funding and supporting disruptive startups in the blockchain and cryptocurrency industry. We have provided early-stage support to several projects that have grown USD market capitalizations of hundreds of millions and even billions. Our incubation program focuses on providing capital allocation, versatile marketing support, and tech assistance.
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