Bloodbaths will probably worsen, at least until the end of the year, as inflation remains above 5% and industry crackdowns are tightened, according to an annual report released by crypto research firm Messari.
However, looking at the industry from a long-term perspective, the company said institutional investment is growing steadily year-on-year, despite temporary bearish dominance, and VCs bet on the industry. He argued that the Web3 revolution would never go away as it continues to grow.
Opportunity in crisis
According to the survey title Crypto Tess 2022, led by Ryan Watkins of Messari, will expect a rate hike at the end of the year to “lose the stock market momentum and hurt growth stock.” Given this context, cryptography is expected to be severely punished as its correlation with the broader macroeconomic environment rises with increasing adoption.
Meanwhile, next year, regulatory scrutiny will tighten and some investor portfolios will decline by about 90%, making FUD dominate the field and unable to confidently fight such claims. increase.
The report suggests that investors should avoid leveraged trading and digital asset shorts due to high volatility during difficult times. In addition, Watkins warned that premature purchases in the bear market (caching “falling knives”) could still cause huge losses.
As Watkins shows, space remains strong in terms of gaining support from venture capitalists and expanding their mainstream adoption, despite short-term challenges ahead. This is evidenced by the increased participation of organizations over the past few years, ensuring that “crashes of the same depth and length as 2014-2015 and 2018-2019” do not occur this time.
As a result, Watkins promoted the idea that space-flowing capital tends to stagnate in blue-chip projects such as Bitcoin and Ethereum.
“When a newcomer enters the space, the money tends to flow in two directions-inside and below. Not out. Capital can flow down to new tokens in higher beta, but circulates back. But in many cases it doesn’t circulate (excluding taxes). Instead, it stops at BTC, ETH, SOL, or the “good stock” of cryptocurrencies. “
Collapse of institutional trust
Messari’s report attributed the bullish outlook for Web3 to a lack of public confidence in financial institutions.Such a view is not bipartisan, as 70% of Americans do. Disapproval Given the history of overspending and bailout failed institutions at the expense of the public interest, he is a member of parliament and no longer trusts policy makers to do the right thing.
Many, especially young investors, consider cryptocurrencies to be “life rafts.” This is an increase in assets based on the theory that decentralized technologies with built-in financial incentives may offer attractive alternatives to today’s legacy institutions. Therefore, growing dissatisfaction has driven investors into crypto assets, Watkins points out, demonstrating significant growth in the user economy.
“We are 99% confident that crypto will be orders of magnitude larger by 2030 because the economy of our users here is orders of magnitude more attractive. We are on the verge of a complete transformation of the global economy. It’s bigger than mobile, and probably the internet itself. “
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