Cryptos are crashing, but some see a bright future

Cryptos are crashing, but some see a bright future

Despite this bear market in which bitcoin and its 20,000 other digital competitors are bogged down, the building of the blockchain ecosystem would continue solidly. To analyse.

A bear market? Rather a build market! This is the comforting witticism signed Michael Graham and Joseph Vafi, two analysts specializing in digital assets at one of the largest independent brokers, Canaccord Genuity. Despite this persistently bearish and rather depressing market, they admit in a report intended for their clients, the development of web3 and the blockchain economy would continue in a robust way.

They want it from the outset as an indicator of the level of investment, in financial and human resources. Crypto businesses raised $25 billion in private capital in 2021 and over $15 billion in the first part of this year alone. Much of this money will be used to fund developers who are flocking to the blockchain ecosystem at a steady pace. The new workforce of the “decentralized Internet” numbered more than 36,000 last year.

While these numbers remain small relative to the overall dev population, Canaccord Genuity analysts remain “very constructively” optimistic about the ability of the web3 community to weather the current storm. Because the ingredients would be brought together to emerge from this ebb of the market “ a larger number of more relevant, stable and larger-scale projects “.

No construction holiday

Nobody knows precisely where this expression “build market” comes from, but crypto entrepreneurs, investors and analysts following this young industry find it quite appropriate for the situation. In this period of purge (speculators and tourists having deserted the market), the actors suffer less from the interference caused by the panic of stock market prices. “Builders” can focus on technological innovation.

This theoretical-romantic philosophy, Michael Graham’s team subscribes to it more than ever, believing that the usefulness of crypto solutions has increased considerably for the technology sector in particular and the economy in general.

total digital asset market cap

We have already seen altcoins, which in many cases represent ‘scalable’ blockchain innovations, capture a significantly increased share of crypto market value over the past year. “, point out the analysts.

The predominance of altcoins on the market, namely the cumulative capitalization of cryptocurrencies, tokens and other corners excluding bitcoin and ether as a percentage of total digital asset capitalization, continued to grow in the second quarter to 44% from 36% a year earlier.

The stablecoin paradox

This growth has been fueled by the rise of… stablecoins. Especially the digital dollar of Circle (USDC), the token of the autonomous platform MakerDAO (DAI) and the token of Tether (USDT), the “bank of cryptos” whose quality of reserves has long been a concern.

Meanwhile, IT developers continue to jump into web3 at an impressive pace. And while they’re a tiny fraction of the global developer community, Canaccord says there’s a lot of potential for growth.

Especially given the volumes of private financing and other interventions by capital riskers which open up a royal boulevard for innovation, repeat the analysts. “ Just as the last bear cycle gave birth to DeFi and NFTs. »

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