Crypto Winter Creates Path For Spring

The crypto winter has reached a new record cold snap, as the bad news bear market devours everything in sight.Bitcoin has dipped under $24K, and Ethereum prices have collapsed by 19%. Cryptocurrencies now have a market cap south of one trillion, down from record-highs of three trillion. Binance has begun blocking withdrawals, saying in a series of tweets the company’s Twitter account that “a batch of bitcoin transactions got stuck” due to low transaction fees, “resulting in a backlog” of bitcoin network withdrawals. Celsius, a crypto lender, also stopped all withdrawals and transfers due to “extreme market conditions.” NFTs continue to plummet in value as well, with floor prices in three popular collections — the Bored Ape Yacht Club, the Mutant Ape Yacht Club, and CryptoPunks down 31%, 27%, and 16% respectively.It might be tempting to look at the state of cryptocurrencies and run away screaming, but there are hidden opportunities, and a crypto winter very much implies a coming crypto spring.Talking to CNBC, Anthony Scaramucci said that “I am encouraged by the fact that Bitcoin is above 50% of the overall crypto market cap right now which is another sign that there’s a flight to quality there.”Consumer Interest Remains StrongA recent Bank of America survey showed surprisingly positive consumer sentiment despite crypto’s rough couple of weeks. Some of the findings included:91% of respondents intended to buy crypto in the next six months, which is the same amount that noted they had purchased crypto in the prior six months.30% said they have no intention of selling their holdings in the next six months.There is a growing interest in the use of crypto as a payment method, with 39% using crypto to make online purchases and 34% using crypto for in-person transactions.The Previous Crypto Winter Saw Blockchain’s Potential ExplodeMorgan Creek Capital Management founder and Chief Investment Officer Mark Yusko during an on-stage conversation at Consensus 2022 said that, “winter is the best time for venture investing,” noting that down periods are when the real development and technological leaps happen. Last crypto winter saw advances in DeFi, NFTs, and scaling systems such as Bitcoin’s Lightning Network and Ethereum’s ZK-rollups.Rather than directly owning cryptocurrencies, investors can get exposure to the blockchain through the Invesco Alerian Galaxy Crypto Economy ETF (SATO) and the Invesco Alerian Galaxy Blockchain Users and Decentralized Commerce ETF (BLKC).For more news, information, and strategy, visit the Crypto Channel.

More Equity Commentary