Five Reasons Why Crypto is Far From Dead
A year ago the crypto industry was at its peak, and future price projections seemed more of a possibility than speculation. The industry was then transitioned into a bear market due toy global inflation, Federal interest rate hikes, and the Russia-Ukraine war. The collapse of “notable” ecosystems like Luna, Three Arrows Capital (3AC), Celsius Network, and Voyager dealt the market another blow.
Now FTX’s insolvency threatens the stability of the industry even further.
This is not the first time that crypto faced an industry-scale setback. In 2014, Mt. Gox, which claimed a huge chunk of the market, went defunct after losing nearly 7% of all the Bitcoin in circulation. Bitcoin has been declared dead at least 200 times in the last five years alone.
But despite all the fear, uncertainty, and doubt ( FUD) spread about digital currencies, cryptocurrencies are far from dead.
If you need convincing, here are five indicators that cryptocurrencies are here to stay:
JP Morgan Launches a Crypto Wallet
JP Morgan Chase Bank registered a trademark to launch its J.P. Morgan Wallet with the United States Patent and Trademark Office (USPTO).
The wallet will be utilized in crypto payment processing, virtual checking accounts, and digital currency transfers and exchanges, among various financial services.
JPMorgan, the largest bank in the US, became the first big U.S. bank to embrace crypto and the metaverse, launching its own JPM Coin, which is huge progress for the asset class.
It aims to attract assets worth trillions of dollars to the Decentralized Finance (DeFi) sector and allow DeFi builders to leverage the yield-generating potential of non-crypto assets.
JPMorgan’s move to adopt cryptocurrencies exhibits that institutional investors are still interested in the asset class despite the bear market.
In addition, this move helps bring crypto into the mainstream, which could greatly bolster an increase in adoption.
The crypto adoption doesn’t stop with JPMorgan but has spread across banks worldwide, including Union Bank of the Philippines, Nomura, and BNY Melon–the oldest bank in America.
The world’s largest publicly listed hedge fund, Man Group, has even set up crypto trading services for institutional clients. Mastercard Foundation has also launched a program to allow banks to provide crypto trading services to their customers.
This demonstrates that institutional investors continue to see long-term potential in cryptocurrencies despite the current bear run.
Brazil approves crypto as a legal payment method
Brazil’s Chamber of Deputies recently passed a bill that recognizes cryptocurrencies as a payment method. The bill will take effect once Brazil’s president, Jair Bolsonaro, signs the bill into law. Why is this a massive win for crypto?
Brazil is:
The largest economy in South America
The 12th biggest economy worldwide
The 7th most populated nation
A leading member of the Southern Common Market, or Mercosur, the South American trade bloc
A founding member of BRICS, the strategic amalgamation of the rapidly growing economies of Brazil, Russia, India, China, and South Africa.
Brazil’s legislature had previously considered a similar proposal to enable Brazilian citizens to leverage digital currencies for payment and secure their private keys from being seized by courts.
The bill was passed by the Senate in April and was recently approved by the Chamber of Deputies. As a regional powerhouse, the legitimacy of crypto as a payment method could drive neighboring nations to progress their use of cryptocurrencies.
Nations like Argentina, Venezuela, and Paraguay are all developing new policies towards crypto investments and mining.
El Salvador to purchase 1 BTC per day
El Salvador’s President Nayib Bukele made Bitcoin the nation’s legal tender in 2021 when the blue-chip digital currency was in the middle of a bull run.
With the bearish market, his decision began looking like a gamble with the country’s resources, with the currency losing nearly 75% of its value from its previous all-time high.
Public records show that the nation currently has 2,381 BTC in its reserves, averaged at a buying price of $43,357.
Many would have thought that the bear market and fall of FTX would have made President Nayib Bukele regret his decision to make Bitcoin the nation’s legal tender.
However, his resolution and stance on the move hasn’t wavered. On November 16, 2022, the president declared that El Salvador will purchase 1 BTC per day during the bearish market. Bukele expressed his confidence in the currency, stating that “Bitcoin is the future.”
Ukraine Accepts Crypto Donations
The Russia-Ukraine war has impacted major global economies, including the crypto markets.
Earlier this year, the Ukrainian vice-prime minister took to Twitter requesting crypto donations to fund the nation’s war relief efforts. This would be the first step for the government to adopt crypto during a crisis.
Digital currencies proved to be a potent tool for marshaling grassroots support by allowing sympathizers to make cross-border transactions as donations to Ukraine.
Institutional Investors Continue Buying Crypto Through Bear Market
A recent Coinbase-sponsored survey revealed that institutional investors are still adding more digital assets to their crypto reserves.
The study, which was conducted between September 21 and October 27, 2022, found that 62% of the respondents either invested in crypto or increased their holdings, with only 12% of institutional investors minimizing their crypto exposure.
About half the respondents reported plans to increase their crypto allocations within the next 3 years, citing their belief that crypto valuation is going to improve over time.
Crypto is not dead
As it stands, big corporations, nations, and institutions don’t think that crypto is dead. They are betting on digital assets, and that should mean something.
Every time someone said that crypto was over, they were proven wrong by a market correction. A bear market is the best time for projects to build stronger blockchain and crypto ecosystems with value propositions to the users.
