WEB3
by BSC News
September 26, 2022
Our financial market analyst Chung Yee says: The crypto market is in an accumulation phase. It is key to spot the right narratives for the next bull cycle.
Bitcoin ($BTC) dipped below $19,000, as bearish sentiments continue to dominate the equities and crypto markets. Investors prefer to adopt a wait-and-see approach while the global economy is still reeling from post-pandemic inflation.
Generally, bear markets are the time for accumulation. Since the crypto market is narrative-driven, finding the next narrative can be an enriching pursuit. In the summer of 2020, the market experienced a Decentralized Finance (DeFi) boom. This was subsequently followed by a crypto bull market that saw Non-Fungible Tokens (NFTs) and the Metaverse themes taking center stage.
The Merge has been successful and Ethereum ($ETH) will likely be a preferred asset for institutional investors because of the deflationary pressure and the utilities it packs. However, in terms of raw performance, Ethereum is still unable to match the likes of other layer-one solutions such as Solana ($SOL), Cosmos ($ATOM), or Avalanche ($AVAX).
This predicament will not be resolved anytime soon. This may lead to a layer-two war in the Ethereum ecosystem. Three layer-2 platforms that offer scaling solutions to the Ethereum ecosystem are Optimism ($OP), Arbitrum and zkSync. Ethereum is the most dominant smart contract platform and has $31.4 billion in Total Value Locked (TVL), more than all other chains combined. Layer-two scaling solutions will have a lot of upside to offer.
Facebook’s rebranding to Meta has brought much attention to metaverse projects. The pandemic has accelerated the pace of development in the virtual space. The Metaverse theme is likely to become a mainstay as most interactions, whether social or economic in nature, can be done virtually.
Crypto market sentiment has again fallen to “extreme fear” as $BTC failed to stay above the crucial $20K mark. Liquidity is thin because the costs of borrowing are high. The interest rate hikes will likely slow down; if not, the U.S. economy will be brought to a grinding halt. This will inevitably lead to a recession.
$BTC might not be suitable as a medium of exchange but it can certainly play a crucial role as a hedge against other traditional assets. The crypto winter is expected to last until inflation stabilizes. Costs of raw materials, availability of food supplies, and the energy crisis are all capable of tanking the global economy. Investors’ confidence can only be restored if these looming problems are resolved.
Related News
Latest News
April 25, 2024
Nigeria Appoints Pro-Crypto Leader to Head SEC
April 25, 2024
BNB Chain Shows Strong Growth in Q1, 2024 Report: Key Details
April 25, 2024
Ethereum Spot ETFs Is Likely to Face SEC Denial in May: Reports
April 24, 2024
Chainlink Launches Cross-Chain Interoperability Protocol (CCIP) for General Availability
April 24, 2024
Hong Kong Bitcoin and Ethereum Spot ETFs Get Approval to Begin Trading on April 30
April 24, 2024
US DOJ Wants 3-Year Prison Sentence for Binance Co-Founder CZ
April 23, 2024
Binance’s 53rd Launchpool Project: What is Renzo Protocol?
April 23, 2024
Texas' Blockchain Association and the Crypto Freedom Alliance Sue US SEC
More News