Cryptocurrencies are crashing, but some see a bright future

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

A bear market? Quite a construction market! This is the comforting humor by 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 the web3 and blockchain economy would continue robustly.

They want it from the start as an indicator of the level of investment, in financial and human resources. Cryptocurrency firms raised $ 25 billion of 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 pouring into the blockchain ecosystem at a steady pace. The new “decentralized Internet” workforce numbered more than 36,000 last year.

While these numbers remain small compared to the overall developer population, Canaccord Genuity analysts remain “very constructively” optimistic about the web3 community’s ability to weather the current storm. Because the ingredients would come together to get out of this market ebb “ a greater number of more relevant, stable and large-scale projects “.

No construction holidays

Nobody knows exactly where this term “build market” comes from, but entrepreneurs, investors and cryptocurrency analysts who follow this young industry find it quite appropriate for the situation. In this period of purge (speculators and tourists who have deserted the market), the actors are less affected by the interference caused by the panic of stock market prices. The “builders” can focus on technological innovation.

Michael Graham’s team adheres more than ever to this romantic-theoretical philosophy, believing that the usefulness of cryptographic solutions has increased dramatically for the technology sector in particular and the economy in general.

We have already seen altcoins, which in many cases represent “scalable” blockchain innovations, capture a significantly greater share of the value of the cryptocurrency market over the past year. “, Underline the analysts.

The predominance of altcoin on the market, i.e. the cumulative capitalization of cryptocurrencies, tokens and more corners excluding bitcoin and ether as a percentage of total digital asset capitalization, it continued to grow in the second quarter to 44% from 36% the year before.

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 “cryptocurrency bank” whose reserve quality has long been of concern.

Meanwhile, IT developers continue to enter Web3 at an impressive pace. And while they’re a small part of the global developer community, Canaccord says there’s great potential for growth.

Especially given the volumes of private financing and other capital risk interventions that open a real avenue for innovation, analysts repeat. “ Just as the last bear cycle gave birth to DeFi and NFT.

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