Is Crypto Dead?

Key Takeaways:

• The crypto market regularly sees $10 billion+ in 24-hour trading volume for the top ten coins ranked by market cap
• Trading volume has been on the rise since the market’s lowest point in mid-2022
• There are several high-profile crypto projects in development that may shape the sector going forward
• Cryptocurrency has traditionally recovered from downturns and is still trending upward when assessing the market from a broader perspective

This article will explore the cryptocurrency sector to best determine an answer to the question - “Is crypto dead?” By diving into modern and exciting blockchain projects, trading data, and historical market movements we can gather an insight into the current state of the crypto world.

Is Crypto Really Dead?

Despite the volatility, cryptocurrencies have shown tremendous growth in the past few years and it's highly likely this trend will continue into the future with the near-approval of several Bitcoin ETFs and regulatory approval. While this doesn't make it a certainty that crypto will explode in value, it greatly reduces the probability of the "crypto is dead" narrative if major institutions back the asset class.

The crypto industry is much, much more than simply buying and selling speculative digital assets. Blockchain technology sees use in all sorts of sectors, including supply chain, defense, identity, and health care. Even during its most recent downturn, the entire cryptocurrency market cap has hovered around the $1 trillion dollar mark. Although this is not a massive figure compared to massive international companies – think Meta, Apple, and Alphabet – it’s also a far cry from a “dead” sector.

Key metrics from Coinmarketcap show that the crypto market still turns over billions of dollars every day.

Top Reasons Why Crypto Isn't Dead

Crypto assets have long sat in a legal grey area with governments unsure how to best handle legislating digital currencies. The Securities and Exchange Commission (USA’s financial regulator) started off 2023 on a warpath and appeared destined to be a massive roadblock for the future of cryptocurrency.

This spells good news for the future of the crypto market, as institutional investors are starting to flock into the industry with regulatory oversight by the SEC. Major players like BlackRock and Invesco have filed to release their own Bitcoin-themed funds on the stock market. This will appeal to retail investors who want exposure to cryptocurrency without the risk of storing the assets themselves. Other financial institutions may follow suit, too.

In short, as more institutional money flows through Bitcoin, it becomes less and less likely that the asset class (and the sector as a whole) will die. Moreover, this will increase the adoption of cryptocurrencies in the broader community.

Bitcoin transactions per day (TPD) are at the highest point in the legacy coin’s history. This is largely on the back of newfound functionality for the coin, with investors now able to create “Ordinals” – NFTs built using a fraction of a Bitcoin. Additionally, scaling solutions such as the Lightning Network have improved Bitcoin transaction speeds and reduced network congestion, leading to greater application in the decentralized finance sector.

Growing number of bitcoin transactions.

Ethereum’s transactions per day haven’t enjoyed any significant swings either way since the crypto bear market set in. In fact, Ethereum’s TPD has basically been stagnant all the way back to 2021, regardless of the market movement surrounding it. This suggests that the use-case of ETH extends far beyond a store of value and is finding much more use as the key to unlocking decentralized finance. Again, the above chart does not paint the picture of a dying industry.

Market cap is basically the circulating supply of a cryptocurrency multiplied by its price. Add this figure together for all digital currencies, and you have the total cryptocurrency market cap. Although the market cap has dropped significantly since the chaos of 2021, it is still much higher than it was just five years ago. Although in the short-term the crypto market feels as though it’s stagnating, when zooming out and looking at it holistically an upward trend becomes apparent.

Cryptocurrencies have been one of the most successful assets in terms of performance over the last 15 years despite downturns. While the crypto market recovered from the 2014 and 2018 bear markets with aplomb, Bitcoin broke its all-time high following both of these events (in 2017 and then again in 2020).

Crypto had significantly less money, projects, and community behind it in 2014. The total market cap was less than $10b – 100x smaller than it is today. If crypto were likely to die due to a bear market, chances are it would’ve occurred when there was far less capital and investors in the industry.

Over the past twelve months, the crypto industry has encountered two disasters that may have been enough to unhinge the industry if it were truly dying.

• TerraUSD’s de-pegging from its stablecoin almost instantly wiped $50-100 billion from the crypto market. The collapse not only resulted in massive losses, it also impacted consumer confidence in third-party apps and DeFi.
• Crypto exchange bankruptcy – FTX at the time a top five crypto exchange – lost $9 billion+ of customer’s funds after ill-advised investments and poor business management. Not only did this significantly harm the reputation of cryptocurrency among the mainstream, but it also had a significant follow-on effect. In short, the crypto contagion caused by FTX could’ve toppled the entire market. However, the industry proved resilient and is still standing today.

Trading volume through the crypto winter pales in comparison to what markets see during major bull runs. This is obvious by observing the crypto market’s peak for daily trading volume occurring in late 2021, before dipping to a 12-month low just a few months later.

However, trading volume has steadily risen through the first half of 2023. This suggests that the market has stabilized and is trending upward; the opposite of what one would expect for a “dying” sector.

Innovation in the crypto sector is alive and well, despite the drop in investor cash flow. Since the crypto market cratered back to Earth in mid-2022, several exciting and potentially revolutionary new crypto projects have been released showing that crypto and blockchain are still alive. The constant stream of new ideas in the industry is a massive part of what will prevent crypto from dying anytime soon.

Examples of some of the more well-known upcoming and ongoing projects include:

• Regen Network. An eco-friendly Layer 1 blockchain intended to measure the environmental impact of manufacturing. Basically, it will measure the cost of a good or service in an ecological sense, rather than simply a fiduciary one.
• Stellar Aid Assist. Stellar is best known for its work with the international payments solution XLM, but they’ve also branched into humanitarian aid. Essentially, the project facilitates human rights organizations sending large amounts of stablecoins to those who need them.
• Friend.tech. A decentralized social media app that lets users buy “shares” in profiles to access exclusive content and private chats. Essentially a marketplace where you can sell yourself or your friends to see who is the most valuable.
• Gridless. Although Bitcoin mining is often associated with harming the environment, this South African project is using it to deliver “micro-energy” to rural African communities.

These are just a select handful of the crypto projects going on right now. The industry is filled with thousands of talented developers and hard-working crypto companies – and until all of this goes away, the industry will survive.

Conclusion

The cryptocurrency sector has had a rough time of it since 2022. Digital currencies have been bleeding value while investors remain quite trepidatious about the market. Yet despite the market’s troubles, the blockchain sector is alive and well. Cryptocurrency is a trillion-dollar industry in a constant state of evolution, with new and revolutionary projects being worked on by businesses from all sectors.

It would take a near-inconceivable collapse for such a large and established market to start dying, let alone be declared dead. While the industry is not without its risks, it is extraordinarily unlikely that the crypto market is going away anytime soon.