Who Will Fuel The Next Cryptocurrency Bull Run: Governments, Businesses, or The Gaming Industry?

The current issue is: What will fuel the next cryptocurrency bull run in light of the recent turmoil in space?

The cryptocurrency market has cycles, just like any other market. Even though digital assets are notorious for becoming more unpredictable than many other asset classes, their price movement still exhibits a well-known ups and downs pattern. Some of this is primarily due to the inherent principles of the algorithm, more notably, the halving of miners' incentives, as seen in Bitcoin's (BTC) four-year cycle. Off-chain variables, such as the tax reporting regulations in the United States, may also be necessary.

But even as the logic of the market demands changes, the logic itself is mostly the same. In other words, just as a bull run ultimately reaches a peak and loses momentum, bears eventually lose control of the market, allowing for another upshoot.

The industry is still recuperating from the fall caused by Terra and the several other pressures that have been present over the previous few years. The global cryptocurrency landscape is bracing itself and pushing on in anticipation of another bull run, notwithstanding how flimsy its comeback efforts may be and how red every coin is relative to just a few months ago. So, from whence may it have come?

National authorities

A few years back, the simple notion that Bitcoin would be accepted as currency in any given country seemed a far-fetched fantasy. However, the Central African Republic (CAR) entered the race in late April, providing Bitcoin & other cryptocurrencies the rank of legal cash after El Salvador's audacious Bitcoin gamble.

An intriguing parallel may be drawn between these two nations. The fact that remittances from overseas account for a significant amount of El Salvador's budget is now well-known in the cryptocurrency community and was considered the economic justification for the experiment. The country's government does purchase Bitcoin, using the "buy the dip" strategy, despite reports suggesting the technique is unreliable.

The situation with the CAR could hardly have been any more different. The war-torn country's economy has been in poor shape for a while. Furthermore, according to statistics from the World Bank, just 10% of the nation's citizens have access to the internet. In other words, just a tiny fraction of the population will likely adopt cryptocurrencies, and given the geopolitical & local context of the shift, the prospects might be highly hazy.

However, since El Salvador wasn't the only country that heavily relied on remittance payments to fund its budget, additional developing countries may decide to do the same. Even the idea that there is precedence for it is significant enough to start the momentum, and the cryptocurrency markets will be aware of it if even one more country joins the club this year.

Institutional blockchain

While individual traders and retail investors were the main drivers of the early cryptocurrency rallies, institutional investors have also recently entered the game. Institutional adoption is becoming a reality as big banks and hedge funds enter the cryptocurrency industry, and fintech giants add support for digital content to their platforms.

Even the "inside baseball" use cases—like JPMorgan testing its private interbank blockchain or a consortium of leading ICT vendors using ClearX's blockchain system for data-on-demand services—matter. They increase the technology behind the crypto ecosystem's reputation, boosting long-term investor trust.

The increased investor trust in the technology is expected to normalize cryptocurrency in the public eye further and attract greater attention to the public blockchain arena, even if many enterprise-grade blockchain projects will probably remain on private blockchains. Furthermore, such initiatives create a complete niche market of products that will aid businesses in creating their private chains. Bridging these private networks with the public sphere can be another area of focus. Since connectedness and inclusivity are at the heart of cryptocurrency, such ideals are only logical.

Manager of assets

The success of the first Bitcoin exchange-traded fund (ETF) in the United States in late 2021 is another indication of how eager the market is for exposure to cryptocurrencies. We've reached a stage where some financial gurus advise everyone—regardless of age or risk tolerance—should have at least little exposure to cryptocurrency.

A shift in perception like that will encourage more asset managers to investigate the cryptocurrency market, whether at a client's request or out of personal interest. The blockchain economy will gain more excellent value as more and more high incomes join the ranks of cryptocurrency investors.

Including all greatest regard to ETFs and other conventional assets, any knowledgeable user of cryptocurrency would tell you that real cryptocurrency is preferable to a conventional asset that mimics its moves. This is since cryptocurrency is far more dynamic. If any Ethereum-pegged ETFs exist, they will solely be held by your broker. Alternatively, using real coins to increase your passive income, you may utilize yield farms, stakes, and other DeFi services.

In this regard, it would be fascinating to observe whether conventional asset managers start to fall behind cryptocurrency-native alternatives like EQIFi, which EQIBank backs. One of its core features is the platform's yield aggregator, which essentially serves as an asset manager by distributing user money across several DeFi protocols to ensure maximum returns. Through platforms that are constantly available and need just a few clicks to maintain, these services increase the profitability of cryptocurrency as an asset class that can operate for its owner around the clock.

A gamer and a game

As anybody who recalls the CryptoKitties mania will tell, blockchain games aren't exactly a new concept. Nevertheless, the play-to-earn sector stepped boldly into the spotlight when Axie Infinity started garnering attention as individuals in the Philippines flocked to it in pursuit of a living during the COVID-19 outbreak.

Given the difficulties Axie Infinity, the industry's standard-bearer, is now experiencing, and it is difficult not to question whether part of this confidence may have been misplaced. The game's inflation issue dates back to when its fundamental business model faltered. The most recent breach, one of the biggest ever in the DeFi industry, worsened this problem.

The difficulties faced by Axie Infinity may be another instance of a young sector working out its own best practices. Now, a slew of new initiatives is preparing to advance this field, aiming to polish it to AAA-level perfection in terms of gameplay and graphics. More gamers will probably start looking at cryptocurrency once these new behemoths reach the market.

Although it may be enticing, there is more to blockchain gaming in the long term than merely another segment of the retail sector. Unquestionably a significant force in the entertainment sector, the video game business attracts fans wherever it goes. The conventional gaming sector has already given rise to a broad range of satellite industries, from esports to in-game advertisements, creating new use cases, audiences, and economic prospects.

Source: Cointelegraph News