Money to Be Made: A Mid-Year Crypto Market Update | 06/07/2024 | Investment News

Although crypto’s total market capitalization surpassed $3.63 trillion earlier this year — the U.S. stock market, for comparison, stands at just over $50 trillion — it can be difficult to understand how it managed to achieve such a small but a significant allocation in more than half a billion investment portfolios and telling.

We can divide the momentum behind crypto enthusiasm into two factions:

• Speculators, who invest in crypto projects due to their exponential returns, as highlighted by Bitcoin’s over 22,000 percent return since 2015, hope to benefit from a similar boost.
• Active investors, who perform due diligence on crypto projects and the many uses of blockchain technology – including decentralized finance and software development – ​​and make informed predictions about the best investments in terms of undervaluation and future performance.

These warring factions, one driven by price and the other by value, have increased the value of the global crypto market by 58.5% year-to-date, up from $2.29 trillion on January 1, thanks to several catalysts. and despite ongoing setbacks it reveals actionable insights that any crypto investor should know.

The Triumph of Bitcoin ETFs in Spot

Since the US Security and Exchange Commission (SEC) approved spot Bitcoin ETFs for trading in January, 11 issuers accumulated combined Bitcoin holdings in excess of $61 billion, marked by consistent inflows, with Black stone, Shades of gray It is Fidelity leader in assets under management.

This influx increased the hundreds of millions across the world who held Bitcoin directly or through exchanges prior to the launch of ETFs, reinforcing the cryptocurrency’s C$1.9 trillion market cap and its value proposition as a decentralized currency and investment vehicle.

Bitcoin has added 67.67% year-to-date and more than 720% since 2019. It trades at C$98,092.05 per coin at the time of this writing, but with numerous updates to the platform on the horizon, including yield and smart contracts, broad upward pressure on prices appears ripe for exploitation.

Actionable insight: Examine these main Bitcoin-related stocks to maximize your operating leverage for cryptocurrency performance.

The Tangible Appeal of Ethereum ETFs in Spot

Eighth place Ethereum ETF are awaiting final trading approval from the SEC – including Fidelity, BlackRock, Grayscale, Bitwise, VanEck, ARK 21Shares, Invesco Galaxy and Franklin – following the organization’s surprise approval of applications from Nasdaq, NYSE and CBOE to offer trading in products based on Ethereum in May.

As the second-largest cryptocurrency after Bitcoin, with a market capitalization of over C$627 billion, Ethereum represents a significant opportunity to unlock value in the US market, where investors can currently purchase the asset only on exchanges. dedicated encryption, which have a spotty security and fiduciary record at best.

Ethereum is a decentralized blockchain network that operates through smart contracts, which are agreements that are self-executing when certain pre-determined requirements are met. This contract functionality, along with an internal token issuance system called ERC-20has enabled Ethereum to flourish into one of today’s most important digital economies, hosting thousands of applications in finance, gaming, digital real estate, cloud computing, NFTs and more.

After reaching a registry for active users in the first quarter of 2024 and surpassing the main crypto generators of network feesEthereum is keeping an eye on growing network activity and fee income through a new modular architecture adopted in March 2024, supported by an abundance of use cases beyond facilitating Bitcoin payments, creating investors with tangible prospects for extraordinary returns.

The Ethereum network’s native cryptocurrency, ETH, last traded at C$5,278.69 per coin. The asset has added 116.80 percent year-over-year, 1,357.47 percent over the past five years and 33,514.72 percent since 2016.

Actionable insight: You can now buy Ethereum through Canadian ETFs such as ETHX, ETH It is FETHgranting you a potentially more attractive entry point compared to US investors.

Continued regulatory pressure

The SEC’s multibillion-dollar fraud case against Binancethe world’s largest crypto exchange, continues to develop, as do its conflictual relationships with Robinhood (NDAQ: HOOD) and leading scholarship Coinbase (NDAQ:COIN)with the latter recently accusing him of plotting to destroy the crypto industry.

These high-profile cases, plus the successful conviction and sentencing of Sam Bankman-Fried, the former CEO of fallen cryptocurrency exchange FTXovershadows a number of smaller ones – such as a doozy in Salt Lake City from earlier this week – which typify the government agency’s relentless attitude towards this emerging asset class, posing an unignorable threat to crypto’s long-term viability.

Earlier this month, in an interview with CNBC, SEC Chairman Gary Gensler described cryptography as “an outsized piece of the scams, fraud and problems in our markets,” where “much of the field is not in compliance with the protections of our securities laws.”

Meanwhile in CanadaCrypto companies have benefited from specific legislative interpretations, which have helped them stay on the right side of the law and allowed the overall industry to prosper, with 10 percent of Canadians owning crypto by 2023, according to the Ontario Securities Commissionabove 3.2 percent in 2016.

Actionable insight: As crypto regulations are likely headed for a tumultuous near-term future in the United States, which accounts for about half of global stock market capitalization, it is important to remember that cryptocurrencies are immune to government intervention by the very nature of cryptocurrencies. blockchain technology. Investors should then try to capitalize on this discrepancy, building your own conviction in the asset class regardless of regulatory concerns, allowing them to buy into sentiment-induced dips and increase the potential for long-term returns.

Crypto’s Enduring Use Case

Regardless of short-term headwinds, cryptocurrencies’ market capitalization is a testament to the long-term appeal of their core use case, which allows people to use their money and do business with each other while cutting out middlemen. that charge fees. This financial and business freedom has led to:

• The first country, El Salvador, to adopt Bitcoin as its national currency. The president behind the country’s adoption was elected to a second term in February.
• Far away delayed efficiencies in countless industries plagued by archaic operational processes, from real estate to healthcare to cybersecurity.
• Hundreds of blockchain-based business creating value for stakeholders through innovation.

As more intermediaries exit the scene, or adapt and adopt blockchain technology, it is no exaggeration to say that the crypto industry has outlived its Wild West reputation, although how exactly it will operate within a decade is anyone’s guess.

Join the discussion: Find out what everyone is saying about crypto stocks on Cryptocurrency Bulletin Boardand check out the rest Stockhouse Stock Forums and Message Boards.

The material provided in this article is for informational purposes only and should not be treated as investment advice. For complete disclaimer information, click here.

(Top image, AI-generated: Adobe Stock)

Source