Is a Bull Market on the Way for Cryptocurrency? See Why David Azzato Thinks It’s a Good Time to Jump In | Feedster
The future of cryptocurrency is being hotly debated right now, particularly as we’ve seen all-time highs in the past few months. When Bitcoin crept above $50,000 per unit, it was a coup that many people never would have dreamed possible, but early adopters like David Azzato definitely speculated about these possibilities.
But the good times don’t last forever, and we have seen some degree of hesitation in the market. Several hedge funds in this sector have recently shut their doors, causing people to wonder if now is a good time to get involved. The answer is that we are likely to see better times ahead, and now is the time to pay attention to the trends. We’ll look at what’s happening in the markets and what we might expect to happen in the future.
Who’s Making Money
There have been a lot of people making money in cryptocurrency, entrepreneurs like David Azzato have been watching with great interest for this very reason, there’s no question about this. But it’s worth noting that investors in the traditional economy are making money as well. The pandemic has been devastating for a variety of industries, but not everyone has seen the same chaos. This is opening doors that we might never have seen if not for COVID. Those who have the time, energy, and discipline to get involved in crypto have serious opportunities to use this to their advantage.
The Nature of Capital Distribution
So you might be asking what a bull market would look like should it occur in the future. The current hypothesis is that you might see two unfolding over the next year or so. Instead of one occurring after another, we might expect to see them happening at the same time.
This is because of the way capital is being distributed. Ultimately, how capital is rotating is a question of scaling, and this question is related to the concerns we’ve seen about crypto almost from the time of its creation. Can the blockchain handle countless transactions every single day if it comes down to it?
This all comes down to perception. Some assets are valuable because of their inherent benefits, and some are valuable because they’re viewed this way. With some projects, companies and creators were more focused on marketing than they were on the actual project. As with so many products, they simply wanted to convince people of the value of the project rather than to deliver on the promise. You can see this taking place with certain altcoins (e.g., anything other than Bitcoin).
There have been plenty of novices coming to the table as of late, drawn by the big numbers and the buying frenzy. Yet since the last bull market, there’s been some degree of inactivity, which seems to have cooled their heels. It explains why we’re seeing the token projects shutting down. Those who threw money at these new ventures didn’t stop to understand what they were investing in, which ultimately caused the inevitable swell and burst.
Some altcoins are ultimately useless in real life, yet continue to hold their market value — often in billions of dollars. This is even after the inevitable pullbacks occur from valuation in the markets. If you’re thinking of getting involved, it’s more important than ever to make the distinction between different kinds of crypto, particularly when it comes to their potential to gain and hold their value. In the past, this might not have been as much of an issue, particularly as numbers soared in one direction only. The recent cooldown shows that a more nuanced strategy is needed in the next 12–18 months.
Right now, decentralized finance (DeFi) is seeing a lot of attention, more so than even the altcoins. This is a reaction to recent poorly designed systems introduced on the market — many of which have closed their doors for good. Investors are becoming ever-wiser to how the technology is made and whether it can fit within the larger ecosystem that is cryptocurrency.
Full Speed Ahead
Constant innovations are going on within this market, and the speed at which everything adjusts is remarkable. This dynamic, particularly when it relates to relatively unknown technology, has shown that its open-source development has the advantage when compared to other payment systems. Decentralized finance is showing remarkable potential, particularly when it comes to its flexible and functional protocols.
As we see the groundwork for this kind of payment, it’s starting to feel like a much more unified system, rather than a collection of startups all hoping to overtake the King that is Bitcoin. DeFi has made leaps and bounds in just a few months. Last year, there were a small handful of projects in the top 100. Today, DeFi is more than 10% in the market. In just a year, it wouldn’t be unlikely to see closer to a quarter. So even if new capital isn’t going to be poured into this sector, we’re going to see a redistribution of resources no matter what.
What’s Driving the Second Bull Market?
Bitcoin is the frontrunner behind the next predicted bull market. Policymakers from all around the globe have rushed to provide some degree of relief from the pandemic, but the long-term effects of this have many people unsettled. Bitcoin as a hedge against the breakdown of fiat has only gained traction because of this.
David Azzato feels crypto was ultimately made precisely because of a situation like this. Should people choose not to rely on the whims of government leaders, they don’t have to. Instead, they can use a different kind of money, one that can be traded without exorbitant fees or the risks of deadly inflation.
This is not to say that this kind of asset can’t be challenged, particularly in the next few years. However, should this occur, it would put politicians under that much more pressure to come up with more money for their citizens, which would further devalue fiat (and thus bolster the value of Bitcoin).
If people were ever going to choose to trust in crypto, now seems like the best time. The more people jump on the bandwagon, the more funding promising projects receive. Players are coming on the scene without the ability to change crypto as we know it. As the foundation for a decentralized economy is built, the possibility of new (and better) versions of each software becomes virtually unlimited.
The level of freedom to both experiment and perfect crypto is unlike anything we’ve ever seen before in our modern economy. In other words, it’s not at all hyperbolic to say that it’s riskier to stick with traditional finance than it is to ‘take a chance’ on crypto. As we move forward, we’ll likely see even more high-profile investors being brought to the table and becoming champions of a very different style of payment. The market cap for crypto is something that no one can ignore these days and even the staunchest critics can’t deny its collective force. Considering the past and likely future, there’s no reason to stay out of the game any longer.
For more from David Azzato be sure to check out his Medium blog where he talks Crypto, and other forms of financial investment.
Originally published at https://www.feedster.com on May 26, 2021.
