The US crypto industry had a lot to celebrate this week: Bitcoin came in inches To reach all-time high prices, crypto ETFs have been dialed in a new way Critical steps Wall Street and next week's presidential election seem set to boost the ecosystem Whatever it is Who will win.
It can't go unnoticed that it's been the worst week ever for America's top crypto employers. On Tuesday, the Ethereum software giant Communication It laid off 20% of its global workforce. Hours later, DIDX, a New York-based decentralized crypto exchange, cut down The group plunged 35% the next morning on Kraken, one of America's largest crypto exchanges. Cut off Head count 15%
Summary of the week, Coinbase reported Missed targets for Q3 and overall decline in customer activity. What does it give?
Experts said. Decrypt Several factors may be at play – from short-term election and regulatory concerns that may soon be resolved, to existential concerns about the place of crypto-native companies in an industry dominated by traditional financial giants.
“This is definitely the weakest bull market of all time,” said Alex Tapscott, managing director of digital assets at Ninepoint Partners. Decrypt.
While mixed headlines about crypto's rising tide seem to be everywhere, the narrative really only applies to bitcoin, which is “in a league of its own” more than ever, Tapscott said.
And even the strength of Bitcoin is no longer necessarily the profit of the crypto industry.
“Yes, the value of Bitcoin has increased dramatically, but where did that income go?” Owen Lau, a senior analyst at Oppenheimer & Company, said: Decrypt. “It's going into traditional financial companies as opposed to crypto-native companies.”
With the titans of Wall Street Blackrock Lau said the billions of dollars worth of Bitcoin trading are thanks to brand trust and rock-bottom fees, while crypto exchanges like Coinbase and Kraken are being left in the cold. Companies tied to the decline of cryptocurrencies such as ETH (like Consency) are in worse shape, he added. (Disclosure: Consensys is one of 22 investors. Decrypt(It is editorially independent.)
Fears related to regulatory uncertainty and the upcoming presidential election may be playing a major role in slowing down crypto activity and investment, at least for the time being.
Christine Smith, CEO of the Blockchain Association, a leading crypto lobby group, said Decrypt Although the Trump and Harris administrations appear poised to bring regulatory clarity and support to crypto, the current US Securities and Exchange Commission Enmity It has caused serious business damage to the industry that may not be repaired until next year.
“I think a lot of the capital is sitting on the sidelines and they're afraid to come here,” Smith said. “So I think regulatory issues and political issues are a big factor in all of this.”
Earlier this week, the Blockchain Association kick off An initiative to track how much money leading crypto companies have spent on lawsuits brought by the SEC. This figure is said to be more than 400 million dollars. On Tuesday, Consensus announced it would lay off 20 percent of its workforce, with the company's CEO Joe Lubin announcing the cuts. Connected. Consensys has spent “several million dollars”. Prevention In court against the SEC itself.
However, some experts argue that even with the US government's embrace of the industry, crypto's woes will not go away. Oppenheimer Lau thinks that crypto-native companies—especially centralized exchanges—are overcrowded, and that many such companies will eventually either die or collapse. obtained In traditional financial organizations.
“I don't know why the market allows 200 exchanges in the world,” he said. “It doesn't make any sense to me.”
Nine Point Tapscott, meanwhile, thinks it will take more than removing the SEC chairman Gary Gensler To unleash a true crypto bull market.
“It's not the only choice,” he said. “If you look at previous cycles, there's always some new app or capability that really excites people.
Tapscott suggests the main innovations of decentralized applications (Daps) or NFTsBoth drove the crypto markets to then unprecedented highs.
“At this point, has anything moved people in the same way?” he said. “I think the answer is yes.”
While the prospect of politicians and Wall Street embracing crypto is certainly exciting, Tapscott added, that development isn't enough to start a true industry-wide bull run — and it can't replace enthusiasm for blockchain technology's new uses. .
“How do you do something with technology that wasn't possible before?” he said.
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