Bitcoin’s value fell 38% in June, the worst month since the flagship cryptocurrency became available on exchanges in 2010.
Meanwhile, the world’s second largest cryptocurrency by market capitalization, Ethereum, ended June with a 45% drop.
The cryptocurrency market was wiped out by $2 trillion in a few months. However, extreme price volatility is a natural part of the digital asset market. Over the past decade, Bitcoin prices have experienced two prolonged bear markets. During the previous cryptocurrency winter of 2018, Bitcoin lost more than 80% of its value before recovering, reaching an all-time high of about $69,000 in November 2021. Currently, BTC is 71.8% of this milestone.
Bitcoin profitable days. The number of days in Bitcoin’s history that it has been held has been profitable compared to its current price.
This drastic drop has shocked many people, with Bank of America reporting that the number of active crypto users in the United States has fallen by more than half, from 1 million in November 2021 to less than 500,000 in May.
However, some see it as an opportunity to store Bitcoin, as a reminder of its recent triumphant rise. Michael Saylor of MicroStrategy Announcement that the company bought another 480 BTC for about $10 million, bringing MicroStrategy’s total Bitcoin holdings to about $4 billion. Salvadoran President Nayib, who is a big fan of the number one cryptocurrency, announced that the country’s bitcoin reserves had been replenished with 80 additional bitcoins for a total of $1.52 million. Twitterer: “Bitcoin is the future. Please sell at a low price. †
Bitcoin could be a hedge against monetary inflation
While it was once thought to be a consumer inflation hedge, which was later found to be false, there is reason for Bitcoin to act as a monetary inflation hedge.
M2 Money Supply vs Bitcoin Price
An M2 monetary aggregate includes all money in circulation, operational deposits with a central bank, money in current accounts, savings accounts, money market deposits and small certificates of deposit.
In the first half of 2020, the percentage change of M2 increased rapidly in a short period of time. The year-over-year percentage change in Bitcoin price followed with a slowdown. Bitcoin price hit new highs after the flash crash that year, and M2 also hit new highs. Year-over-year growth in M2 peaked at the end of February 2021; Bitcoin price spiked shortly thereafter, in mid-March 2021. In other words, Bitcoin price has acted as a lagging indicator of the M2 money supply in recent years. In this case, Bitcoin can act as a hedge against currency inflation.
Bitcoin is no longer the most popular blockchain
While the Chainalysis report shows the number of unique wallets each currency has sent to the services over time, it seems Bitcoin was leading in terms of unique users until March 2020, when Ethereum caught up. It makes sense that this growth would match the growth of DeFi, as the rise of DeFi has led to the creation of many services that accept Ethereum and other tokens built on its blockchain.
Source: Web3 Channel Analytics Status Report
Bitcoin once dominated the overall transaction volume, but is now dominated by a large number of smart contract-enabled coins such as Ethereum.
Share of Total Trading Volume by Currency Type, 2010-2022
Source: Web3 Channel Analytics Status Report
So far, in 2022, BTC has accounted for just over 10% of the total cryptocurrency trading volume. Much of that comes from stablecoins, but 45% now comes from Web3 and DeFi cryptocurrencies.
The most promising Web3 and DeFi coins
With that in mind, let’s take a closer look at Web3 and DeFi and the coins that are currently showing strong performance or could rise in the near future.
In the past two weeks, the price of STRAX, the original token of the Stratis blockchain, has risen by more than 50.5% as the project’s most compelling initiatives have been announced, including the launch of a British pound-pegged stablecoin. Sky Dream Mall, powered by Stratis, a metaverse powered by the Stratis blockchain, is expected to launch soon.
The company is working with Prix Waterhouse Coopers (PwC) to obtain the necessary permits from the Financial Conduct Authority (FCA). Stratis is also developing a ticketing system that will create non-fungible tokens (NFTs) that will be used to validate access to various events and venues.
The project aims to provide C# and .NET (Microsoft) developers with a range of products and solutions to help them adopt blockchain technology and migrate their existing applications so that it appears strong in the market to have.
Cypherium is another Web3-ready blockchain connecting CBDC, DeFI and Web3 through protocol interoperability. It is a hybrid consensus system that maximizes both decentralization and scalability without sacrificing one over the other through its Proof-of-Work and HotStuff consensus mechanisms.
Developers can build breakthrough applications using Cypherium’s comprehensive platform to shape the future of business, legal and enterprise solutions.
With its status as a FedNow service provider, Cypherium will continue to work with financial regulators to develop CBDC applications and regulated DeFi projects, making it one of the other promising projects.
Significant gains against the backdrop of an overall market decline, the CPH token is up 49.6% over the past two weeks and 29% month-over-month.
Spell Token (SPELL) is part of the abracadabra.money lending platform, under which interest-bearing tokens (ibTKN) are used as collateral for borrowing the USD-pegged stablecoin, Magic Internet Money (MIM). By leveraging SushiSwap’s Kashi lending technology, Abracadabra’s isolated credit markets have fueled innovation in decentralized finance (DeFi). In isolated credit markets, risk is not shared. In the event that a currency pair loses liquidity or something goes wrong with the smart contract, only that pair is affected, not the platform as a whole. In this way, Abracadabra can offer a wide variety of pairs that are not supported by most other decentralized exchanges (DEXs).
SPELL is up 22% in the past two weeks. It was up 116.6% year over year – a very impressive gain in the current market environment.