Crypto turnaround: Market participants are coming out of the bear phase, experts suggest
Last week, cryptocurrency investors got a breather after the fall in the value of digital tokens. Over the past seven days, Bitcoin rose nearly 3 percent, and Ethereum rose 13 percent, according to coinmarketcap.com. Bitcoin and Ethereum are the largest and second largest digital tokens by market capitalization, respectively.
Market data suggests that the total market capitalization of crypto has risen from $1.03 trillion to $1.1 trillion over the past seven days. As of Friday, m-cap was at $1.14 trillion. “Traded volumes continued to witness double-digit gains for the third consecutive day for the cryptocurrency market. Combining this statistic with the third consecutive day of gains suggests that market participants are finally emerging from the bear phase,” Edul Patel, CEO and Co-Founder of Mudrex, told Business Standard.
“Over the past week, Ether has been up nearly 20 percent. And with Bitcoin dominance steadily falling, it could signal a bull phase for altcoins,” he added. Altcoins are digital tokens that are considered to be alternatives to Bitcoin. Since June 12, Bitcoin’s share of the market has fallen from 47 percent to 40 percent. Ethereum’s market value, on the other hand, has risen from 16.27 percent to 19 percent.
However, the crypto market in India saw some major developments last week. WazirX, one of the largest crypto exchanges in India, was raided by the Enforcement Directorate (ED) for alleged money laundering. Binance, the largest crypto exchange in the world, announced that it was acquiring WazirX in 2019, but the deal could not go ahead.
However, the executives of the two companies have been waging a war of words on Twitter regarding the ownership of WazirX.
Another development came as a report from the United Nations (UN). It said cryptocurrency rose at an “unprecedented rate” during the Covid-19 pandemic. 7.3 percent of Indians own these assets, the 7th highest in the world. The highest crypto investors came from the two countries at war, Ukraine and Russia.
The United Nations warned that due to the lack of regulations on cryptocurrency, emerging economies should be careful in handling these assets. It said: “If cryptocurrencies continue to grow as a means of payment, and even unofficially replace domestic currencies, the ‘monetary sovereignty’ of countries could be put at risk.”
However, Minal Thakur, executive vice president of growth and strategy at CoinDCX, said the fate of crypto and web3 looked “bright” in India.
“According to the UN report, crypto shows a dramatic development in recent years, which is a positive sign given that 65 crore Indians (~50%) have access to the internet now. More crypto innovations will continue to grow in India regardless of continuous fears around rising prices, inflation, etc,” Thakur said.
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