Challenges encourage progress. Technology, like life itself, cannot be static. Only dynamics drive positive change. Amid the crypto market collapse in mid-May, many retail and institutional investors began to lose faith in the bright future of cryptocurrencies and bitcoin in general.B T c) In a special way. Corporations and institutions, whales and early adopters converged in a single impulse – the internet was overwhelmed by a wave of distrust towards “cryptocurrency number one” as the best defensive asset, better than gold and everything else. which was invented earlier.
One needs to see the full picture here to know what is happening. The last time the market suffered a more or less comparable and significant loss was a year ago, in March 2020. This Year, Panic Selling Due to a Series of Negative Events – Elon Musk’s Twitter Crusade Against BTC, Were rumor court case Against Binance and Latest action on crypto Note the massive collapse of digital assets and the subsequent “crypto winter” – on the part of the Chinese government – at the peak of multiple asset rates in December 2017.
However, many people who have little understanding of how the cryptocurrency market functions do not realize the depth of the changes that have taken place in the space in recent years. Emotions are the worst enemy of an investor or trader in the rapidly growing digital asset ecosystem. It is worthwhile to objectively look at the facts and analyze the changes in order to understand the true value of the ecosystems that grow on the fertile soil of the blockchain.
wind of change
The investment mindset has changed in recent years. Even though it continues to be dominated by a highly speculative component, there is also a practical application for settlement. Investors shifted from short term speculation to long game. The number of bitcoin atm is doubled This dramatic growth since 2020 clearly reflects the growing demand for the world’s largest crypto asset. From a Niche, the Cryptocurrency Industry Has developed In a billion dollar industry.
Stablecoins – tokens pegged to their respective fiat assets such as the US Dollar, Euro, etc. – have gained significant weight in 2020-2021. For example, with the emergence of new platforms known as decentralized finance, or DeFi, protocols, opportunities appeared to provide leverage without the risk of major assets. Such platforms are nothing more than distributed programs that provide clearing, custody and settlement services. Every year they take a big chunk of the pie from traditional financial institutions. There was also an increase in activity in decentralized trading platform environments because their infrastructure does not have the same common vulnerabilities as centralized trading platforms.
Decentralized exchanges outperform centralized exchanges in terms of trading volume, exhibiting a thousand times development Only in the trading volume of the previous year. Interfaces for interacting with DeFi can be created by any programmer anywhere on the global scale, and the essence of this interaction is the development of a financial ecosystem running on the global blockchain. So far, the market capitalization of DeFi has been reached Over $100 billion, and this trend will undoubtedly continue soon.
Speaking of examples, we can highlight that even large companies such as Deutsche Telekom have abandoned private blockchains and are study of public infrastructureSupports nodes in networks like Ethereum, Solana, Algorand, Celo, etc. This fact suggests that the world of decentralized finance is gaining ground in the global market for clearing, custody and settlement services – just as bitcoin had previously achieved the status of a shield asset, removing gold from its throne.
We see corporate demand pick up when real rates on dollar deposits turned negative (central bank rate minus inflation). Inflation expectations have picked up in the past year, fueling the demand for long-term capital protection. Today, bitcoin is not only successfully winning the hearts and minds of speculators and hedge funds, who, realizing the inevitability of devaluing dollar balances, vote with their money and move some Treasury liquidity to digital assets. .
there are still challenges
Meanwhile, divergence in regulatory outlook continues. Some jurisdictions have made bills, but they have no practical application. Meanwhile, other countries are at the beginning of the road to making regulations, and some ban the use of cryptocurrencies – the recent example of China being a case in point.
In the United States, for example, banks were allowed provide custody services for cryptocurrency assets. Emerging markets in countries such as China, Russia and India stand aloof, running from fire to fire, remain uncertain and are trying to generate some publicity at the state level, offering so-called “tech candy” to potential investors. are doing. Unfortunately, in practice, all projects that reach the world level often go to other jurisdictions – which is very sad.
The future of the cryptocurrency sector is undoubtedly optimistic. Any period of “cleansing” and dumping of price snags, corrections and declines should be treated as another round of growth. In the near future, we should expect investors to turn their attention from careful market monitoring, hype about coins (which carry no value to the community) and anticipating new price records for products manufactured in developing regions. Will remove The cryptocurrency sector is anticipating the emergence of more convenient, reliable and accessible interfaces to the digital asset market for mainstream investors as well as with the 3.0 generation blockchain – for which fierce competition will begin over the next few years.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making a decision.
The views, opinions and opinions expressed here are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Gregory Klumov is a stablecoin expert whose insights and opinions appear regularly in many international publications. He is the founder and CEO of Stasis – a technology provider that issues the most widely used euro-backed stablecoins with high transparency standards in the digital-asset industry.