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He states this in a report entitled “The Future of Cryptocurrency Exchanges” published by the Boston Consulting Group, an international strategic consulting firm based in the United States. Despite the slowdown in recent months, the cryptocurrency market has taken a prominent place in the economy.
BCG experts testify:
“Today’s top 20 cryptocurrencies are very different from those of just 5 years ago. These include Tier 1 cryptocurrencies that can validate and complete transactions without the need for another network. In general, the cryptocurrency ecosystem has matured significantly: today there are about 10,000 applications compared to 800 in 2017 “.
Furthermore, the report notes that most of the money currently flowing into the cryptocurrency ecosystem is associated with institutional investments, which implies a decrease in volatility and highlights the previously mentioned term “profit”. Boston Consulting Group scores points on Coinbase’s example (NASDAQ: COIN) and the company’s annual financial statements. a sharp increase in the volume of institutional investments, which went from 20% in 2018 to 68% at the end of 2021.
Challenging first half of 2022 for the cryptocurrency market
The cryptocurrency market has been going through a difficult period for more than six months due to a more global and multifactorial crisis that has affected all markets, the latter all in decline, with the exception of the energy market, which benefits greatly from the situation. Furthermore, the technology sector, on which the cryptocurrency market depends, is the one that has suffered the most in recent months.
The prices of Bitcoin and Ethereum, the two most important currencies in the cryptocurrency ecosystem, have fallen by more than 50% from all-time highs at the end of 2021. On November 12, it was € 56,278.52 for Bitcoin and € 4,058.72 for Ethereum on the same day.
Despite a small increase in recent weeks due to the upcoming Ethereum blockchain update, the cryptocurrency market has failed to emerge from stagnation. Today at 11:15 (GMT + 2), the two main currencies in the crypto ecosystem are priced at 20,982.22 for Bitcoin and 1436.63 for Ethereum, respectively.
In the first half of this year, the cryptocurrency market has faced a number of obstacles; First, it is the loss of safe haven status for digital assets due to the recent strengthening of the dollar, the second is due to geopolitical reasons (in particular, the Russian invasion of Ukraine in February). We also need to consider the security aspect and a series of subsequent hacks targeting the crypto ecosystem and bridges in particular. a term that refers to platforms that specialize in transfers from one blockchain to another.
It should be noted that tax changes in some countries have contributed to the above difficulties; This is especially true in India, where the government has decided to impose a tax of up to 30% on digital assets.
WazirX, CoinDCX and ZebPay, the country’s top three exchanges, reported traffic drops of more than 70% due to this change, as did another law introduced in India in early July by Finance Minister Nirmala Sitharaman. This new legislation requires a 1% withholding tax on every cryptocurrency transaction.
the future of the cryptocurrency market
As for the future of the cryptocurrency market in the second half of 2022, Most analysts expect market volatility in the second half of the year to remain as high as in the first. Additionally, many tokens whose tokenomics are inherently flawed or worthless may not survive this year.
Risk of loss of capital.