Who Will Fuel The Next Cryptocurrency Bull Run?

Who Will Fuel The Next Cryptocurrency Bull Run?

September 8, 2023 by Diana Ambolis
The current question is: What will fuel the next crypto bull run in light of the recent turmoil in space? Ariel Shapira, an Israeli serial entrepreneur, writes a monthly piece on crypto technology that discusses new developments in the blockchain, cryptocurrency, and decentralized finance (DeFi) sectors and how these technologies will affect the 21st-century economy.
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The current question is: What will fuel the next crypto bull run in light of the recent turmoil in space?

Ariel Shapira, an Israeli serial entrepreneur, writes a monthly piece on crypto technology that discusses new developments in the blockchain, cryptocurrency, and decentralized finance (DeFi) sectors and how these technologies will affect the 21st-century economy.

The cryptocurrency market experienced cycles, just like any other market. Despite the fact that digital assets are notorious for being more volatile than many other asset classes, their price movement still exhibits a well-known ups and downs pattern. Some of this is largely due to the inherent principles of the algorithm, more notably, the halving of miners’ incentives, as seen in Bitcoin’s (BTC) four-year cycle. Off-chain variables, like the tax reporting regulations in the United States, may also be important.

But even as the logic of the market demands changes, the logic itself is mostly the same. In other words, just as a bull run eventually reaches a peak and loses momentum, also bears eventually lose control of the market, allowing for another upshoot.

The global cryptocurrency scene is bracing itself and pushing on in anticipation of another bull run, notwithstanding how flimsy its rebound attempts may be and how red every coin is compared to just a few months ago. Obviously, the market is still recuperating from the fall caused by Terra and the several other pressures that have been present over the previous few years. So, from where might it have come?

Also, read – Crypto Investment Trends That Venture Capitalists Are Bullish On

National authorities

A few years ago, the simple notion that Bitcoin would be accepted as currency in any given country seemed like a far-fetched fantasy. However, the Central African Republic (CAR) entered the race in late April, providing Bitcoin and other cryptocurrencies the status of legal cash, following El Salvador’s audacious Bitcoin gamble.

The fact that remittances from overseas account for a sizable amount of El Salvador’s budget is now well-known in the cryptocurrency community, and this fact was considered the economic justification for the experiment. The country’s government does purchase Bitcoin, adopting the “buy the dip” strategy, despite reports suggesting the technique is unreliable.

The situation with the CAR could hardly have been more dissimilar. The war-torn country’s economy has been in poor shape for a while. According to the World Bank, only 10% of the nation’s citizens have access to the internet. Just a small fraction of the population will likely adopt cryptocurrencies, and given the geopolitical and local context of the move, the prospects can be extremely hazy.

However, since El Salvador is not the only country that heavily relies on remittance transfers to fund its budget, more emerging economies may decide to do the same. Even the fact that there is precedence for that is significant enough to start the momentum, and the cryptocurrency markets will be aware of it if even one more country joins the club this year.

Institutional blockchain

While individual traders and retail investors were the main drivers of the early cryptocurrency rallies, institutional investors have also recently entered the game. Institutional adoption is becoming a reality as big banks and hedge funds enter the cryptocurrency industry, and fintech giants add support for digital assets to their platforms.

Even the “inside baseball” use cases—like JPMorgan testing its private interbank blockchain or a consortium of leading ICT vendors utilizing ClearX‘s blockchain system for data-on-demand services—matter. They increase the technology underlying the crypto ecosystem’s reputation, boosting long-term investor confidence.

The increased investor confidence in the technology is likely to further normalize cryptocurrency in the public eye and attract more attention to the public blockchain arena, even though many enterprise-grade blockchain projects will probably remain on private blockchains. Furthermore, such initiatives create a complete niche market of products that will aid businesses in creating their own private chains. Bridging these private networks with the public sphere can be another area of focus. Since connectedness and inclusivity are at the heart of cryptocurrency, such ideals are only logical.

Manager of assets

The success of the first Bitcoin exchange-traded fund (ETF) in the United States in late 2021 is another indication of how eager the market is for exposure to cryptocurrencies. We’ve reached a point where some financial gurus advise everyone—regardless of age or risk tolerance—should have at least some exposure to cryptocurrency.

A shift in perception like that will encourage more asset managers to investigate the cryptocurrency market. The blockchain economy will gain more value as more and more high incomes join the ranks of cryptocurrency investors.

With all due respect to ETFs and other conventional assets, any knowledgeable user of cryptocurrency would tell you that real cryptocurrency is preferable to a conventional asset that mimics its moves. Crypto is far more dynamic. If any Ethereum-pegged ETFs ever exist, they will solely be held by your broker. On the other side, you can use yield farms, stakes, and other DeFi services with real coins to increase your passive income.

In this regard, it would be fascinating to see if traditional asset managers start to fall behind cryptocurrency-native alternatives like EQIFi, which EQIBank backs. One of its core features is the platform’s yield aggregator, which effectively serves as an asset manager by distributing user funds among several DeFi protocols to ensure maximum returns. Through platforms that are constantly accessible and require only a few clicks to maintain, these services increase the profitability of cryptocurrency as an asset class that can work for its owner around the clock.

A gamer and a game

As anyone who remembers the CryptoKitties mania will attest, blockchain games aren’t exactly a new concept. Nevertheless, the play-to-earn sector stepped proudly into the spotlight when Axie Infinity started garnering attention as individuals in the Philippines flocked to it in pursuit of a living during the COVID-19 outbreak.

Given the difficulties Axie Infinity, the industry’s standard-bearer, is experiencing. It is difficult not to wonder if part of this pride may have been misplaced. The game’s inflation issue dates back to when its fundamental business model started to falter. The most recent hack, one of the biggest ever in the DeFi industry, worsened this problem.

The difficulties faced by Axie Infinity may simply be another instance of a young sector figuring out its own best practices. Now, a slew of fresh initiatives is preparing to advance this field, aiming to polish it to AAA-level perfection in terms of gameplay and visuals. More gamers are probably going to start looking into cryptocurrency once these new behemoths reach the market.

Although it may be enticing, there is more to blockchain gaming in the long run than merely another segment of the retail sector. Unquestionably a major force in the entertainment sector, the video game business attracts fans everywhere it goes. The traditional gaming sector has already given rise to a wide range of satellite industries, from esports to in-game advertisements, creating new use cases, audiences, and business prospects.