Analyst Presents 4 Charts That Prove Crypto Is Not Dead

As the crypto market faces constant volatility challenges and regulatory pressures, major cryptocurrencies have experienced significant declines and slowed growth over the years. However, a new chart report has revealed that despite these downward trends, the crypto industry is still achieving new milestones in terms of adoption. 

Chart Reveals Crypto Adoption On The Rise

The broader crypto market has been recovering at a snail’s pace since the crypto crash in 2021. Cryptocurrencies were at their peak during this time, and Bitcoin had the highest growth rate, reaching a price of over $60,000 while Ethereum’s price was around $4,000. 

However, the upward trend was short-lived and the industry was hit with many challenges including regulatory hurdles that restricted its advancement into different regions and market forces which constantly caused instability in crypto prices. 

Amid all this, DeFi Researcher, Thor Hartvigsen has presented in an X (formerly Twitter) post, chart reports that display the continuous growth in adoption of the crypto industry despite negative trends in the ecosystem. 

Hartvigsen disclosed the four charts showed an increase in crypto adoption in the industry. One of the charts shows a spike in total daily wallets for users in the Ethereum and Layer 2 (L2) landscape which was previously in a bear market.

Another chart reveals a surge in traction in decentralized stablecoins which have been in decline since August 2022. 

The third chart illustrates Ethereum’s growth rate over the years, surpassing $10 billion in revenue and promoting the emergence of innovative businesses in the crypto industry.

The last chart shows liquid staking at an all-time high, growing from $7.9 billion to more than $20 billion in 2023. This report also adds to recent data which revealed a spike in liquid staking platforms in the United States after hitting 370,000 Ether (ETH) in only five days and reaching a new milestone of $20 million staked ether. 

Crypto total market cap chart from Tradingview.com

Major Incentives Driving Growth Rates

The evolution of the crypto industry has been pushed back a couple of years following the Terra Luna crash which saw one of the largest stablecoins declining by 99%. 

After the LUNA crash, the crypto industry suffered another loss from the FTX descent and insolvency. The industry has been under scrutiny by major regulatory authorities like the United States Securities and Exchange Commission (SEC). 

There have also been multiple crypto scams, rug pulls, and cyber attacks over the years on major exchange platforms and marketplaces in the industry. 

Presently, the crypto industry is slowly gaining back its strength and advancing rapidly, as seen in some major innovative developments like the integration of spot Bitcoin ETFs, and Ethereum spot ETFs.

The ecosystem is also thriving with new infrastructure upgrades and improvements in the DeFi ecosystem, ensuring the sustainability and longevity of the industry.

SUSHI Down 45%: What’s Driving the Decline?

The price of SUSHI, the native token of SushiSwap, a decentralized exchange, is down 45% from February 2023, when prices peaked at $1.63, the highest level in six months.

SushiSwap Token Redesign

This contraction is despite the successful implementation of a proposal to redesign SUSHI’s tokenomics, making SUSHI, a governance token, more deflationary.

The proposal was first made in December 2022 by Chief Chef Jeremy Grey and was voted on and agreed on by the community early this year.

The proposal passed with a majority vote and will seek to reduce the SUSHI supply over the years. At the same time, it will increase the rewards for liquidity providers while encouraging users to stake SUSHI for longer.

Grey argued that this implementation would promote decentralization while making the protocol have “more equitable governance with sustainable economics.” Eventually, by redesigning SUSHI’s tokenomics, the goal will be to keep annual inflation between 1% to 3%.

The latest data from MoneyPrinter shows that SUSHI’s annual inflation stands at 1.23%, aligning with SushiSwap’s tokenomics redesign. If anything, this inflation rate is lower than Bitcoin, which has an annual issuance rate of 1.82%. SUSHI’s inflation is also lower than Cardano, which has an annual emission of 1.79%.

While analysts expect low inflation to support prices in the long haul, the performance of SUSHI in the first half of 2023 has been dismal. SUSHI is down 45% from 2023 highs and 99% from 2021 peaks when the token changed hands at around $22.

Blame The Winter, Hack, And Regulators

While the markets have recovered, some, including SUSHI, could still be reeling from the effects of the crypto winter.

Last year, Bitcoin, the largest coin by market cap, crashed by over 70% after peaking at over $69,000 in November 2021. The collapse of BTC dragged the altcoin market with it, forcing the more volatile assets even lower, adversely affecting SUSHI.

As an illustration, SUSHI is trending at 2022 lows at around $0.89, retesting a critical multi-month support level.

SushiSwap Price On May 17| Source: SUSHIUSDT On Binance, TradingView

Prices are also capped as investor confidence took a hit following SushiSwap’s RouterProcessor2 contract exploit in early April 2023. Hackers ended up with $3.3 million. Although the flaw has since been patched, the reputational damage associated with the vulnerability dents investor confidence.

It remains to be seen how SushiSwap will navigate potential new regulations, particularly those from the United States. Some policymakers have taken a negative stance towards cryptocurrency, causing users in the country to hesitate to engage with DeFi protocols due to potential legal consequences.

Please Enjoy the Final Crypto Winter

With U.S. regulations and policy coming soon, the frauds, scams and irresponsible investment management practices that led to the current market downturn will be things of the past, reasons Paul Brody of EY.

Prolonged Crypto Winter Pushes Kraken Exchange Out Of Japan

The crypto winter is a drawn-out one exacerbated by the collapse of large players such as Terra and the FTX crypto exchange. As crypto businesses continue to feel the effects of the current bear market, another major player, Kraken, has been affected to the point that it has, once again, put a pause on operations in Japan.

Kraken Consolidating For Crypto The Bear Market

Crypto exchange Kraken plans to stop operations in the Japanese market. The exchange said this in a government publication in the country which states that it will deregister from the Japan Financial Services Agency (JFSA) on Jan. 31, 2023.

The company cites the current global crypto market state as the reason for this move, saying that “the resources needed to further grow our business in Japan aren’t justified at this time.” As such, the exchange plans to stop providing services to users in the country.

The decision comes just a month after Kraken revealed that it was laying off about 30% of its workforce. Given the size of the company and the amount of labor it employs, this came out to about 1,100 employees who lost their jobs at the crypto exchange.

Crypto total market cap chart from TradingView.com (Kraken)

As for its users in Japan, the exchange assured that it would allow users to withdraw all of their funds held on the exchange. Users are advised to withdraw all of their fiat currencies and cryptocurrencies being held on Kraken Japan before the Jan. 31 date. Kraken says it has enough funds to enable all users to withdraw assets.

It further added:

“We value the trust our clients put in us and we will do what we can to minimise the impact of our decision for you. That’s why we are committed to ensure a seamless transition and we hope the information in this email will help you decide what is the best option for you.”

In November, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) fined Kraken over $362,000 over sanctions violation for providing access to users in Iran. The crypto exchange agreed to settle for this figure with an additional $100,000 committed to implementing sanctions compliance controls.

Bitcoin Price Crystal Ball – What Happens To BTC After Christmas 2022?

Bitcoin and the broader crypto market rapidly reversed course in response to the U.S. Federal Reserve’s announcement of a 50-basis-point increase in interest rates, erasing any gains made before the disclosure.

The Federal Reserve has been steadily raising interest rates in an effort to ease the economy and rein in inflation, which has driven prices of basic commodities to record highs.

Yesterday, Bitcoin’s price reached a one-month high and had a brief recovery of positive momentum, but a conservative report from the Federal Open Market Committee (FOMC) and remarks from Fed chair Jerome Powell drove BTC to an intraday low of $17,659.

A Whipsaw For Bitcoin After Fed Disclosure

According to TradingView data, the BTC price saw a bit of a whipsaw in response to the central bank announcement, rising to an intraday high of $18,377 before falling to a low of $17,663 in a few of hours before bulls pushed it back up above the $17,800 support.

Prior to Powell’s announcement, the key indexes were in the green zone; however, they plunged into the red zone afterwards. At the close of trading, the Dow Jones, Nasdaq, and S&P were all in painted in crimson.

Powell told members of the press on Wednesday afternoon that “we have more work to do” and that “inflation risks are on the upside.”

Coingecko statistics indicates at the time of writing that Bitcoin (BTC) and Ethereum (ETH) values have fallen by more than 2.7% in the last hour and are presently trading at $17,717 and $1,292 apiece.

In the past 24 hours, the market capitalization of all cryptocurrencies declined 1.42 percent to $857.98 billion, representing a decline of $85.72 billion. The overall crypto market volume during this timeframe has decreased by 14.40%, reaching $45.67 billion, based on latest data.

The Experts’ Crystal Ball: BTC Price For 2023

In its Crypto Outlook For 2023 report by Forbes Advisor, it predicts that Bitcoin’s price could decline to $13,560 in 2023, given that the crypto’s reputation has been severely damaged by the problems and scandals of 2022 and that broader markets are suffering.

Jim Wyckoff, a senior technical analyst at Kitco, has a different take: he said that Bitcoin’s surge to $18,377 indicates a five-week high, which actually signals optimism in the crypto’s price trajectory.

According to Wyckoff, this week’s price action has created a bullish “upside breakout” from a “choppy and sideways trading range” on the daily chart, indicating the emergence of a price upswing.

For his part, renowned analyst like Michael van de Poppe says that the market has already reached its bottom and that a Bitcoin relief bounce is in the offing.

Meanwhile, the question that arises now is whether the current market turmoil will persist into the new year, and if so — when the crypto winter’s frozen edges might begin to thaw.

Crypto Crisis Pushes BTC Mining Difficulty To Bottom Spot, Any Possibility Of Reversal?

The low profitability of BTC mining is still puzzling for many crypto fanatics and investors. There’s no surprise here, given the ever-increasing energy costs. Moreover, the bear market is also significantly impacting Bitcoin’s mining difficulty.

As for now, making reasonable profits from mining Bitcoin is not probable. This fact, however, doesn’t imply that BTC mining is fruitless. On the contrary, miners would be alright, provided they engage the right tools in the mining process.

The Difficulty of BTC Mining Drops

The BTC mining sector is experiencing a downturn. The difficulty percentage of mining Bitcoin dropped to about 7.32% on Tuesday. This occurrence isn’t far-fetched from the plummeting prices of digital tokens, which has also lessened miners’ gains.

According to data from the BTC.com mining pool, the system made the most significant adjustment since July 2021, with block height at 766,080. The adjustment matched July 2021, when many miners backed out of the system. This motion resulted from China’s ban on digital currencies at the time.

As per the BTC mining process, the computing power or hashrate upon mining defines the outcome of mining difficulty. This system is essential to stabilize the time required to achieve one block of Bitcoin. As the number of miners increases, so does the mining difficulty.

In addition to the reduced mining difficulty, BTC miners are also seeing a steady increase in energy costs and electricity rates. These events also negatively impacted miners’ revenue in the last few months.

Howbeit, miners are not the only victims of the stubborn plummeting price of Bitcoin. Recognized producers like Argo Blockchain (ARBK) and Core Scientific (CORZ) strive to survive bearish market liquidity pressures. Compute North, on the other hand, saw Chapter 11 bankruptcy as the only way out.

The company witnessed a breakthrough after acquiring new and efficient equipment a few months back. At the time, they received new miners who drove several projects into success.

Also, there was a notable increase in difficulty and hashrate between August and November 2021, when the last positive adjustment was made.

Crypto Winter Becomes The Main Influence

The company had hoped that the success would continue, only to be driven by the adverse wind of the 2022 crypto winter. This was the beginning of the downturn of the hashrate. Nevertheless, it displays higher values than those shown immediately after China’s breakoff from the crypto sector.

Miners now seek to have a reduced price of electricity due to the steady plunging in profits. But, according to a Luxor analyst, Jaran Mellerud, miners still pay between $0.07 and $0.08/kWh for an average electricity price of $0.05/kWh. In the meantime, the price of BTC stands at $16,961. The token shows a 24-hour price change of -0.46%.

Crypto Crisis Pushes BTC Mining Difficulty To Bottom Spot, Any Possibility Of Reversal?

Bitcoin will most likely surpass the $17,000 Boundary l BTCUSDT on Tradingview.com
Featured image from Pixabay, chart from TradingView.com