2 - 4 minute read
The world of crypto is on the cusp of a new era, according to research from Bernstein. The collapse of FTX was the catalyst for a new bullish cycle, the report said. After FTX’s demise, investors learned the importance of decentralization and self-custody wallets. Alongside this, macro catalysts are aligning for bitcoin, with continued weakness in US regional banks and deposit outflows all reflecting concerns about the “centralization of money.” As such, “Any potential dislocation, whether on the bank’s credit side, or on the sovereign side … positions bitcoin perfectly as a safe haven asset alongside gold,” according to analysts Gautam Chhugani and Manas Agrawal.
Bitcoin has already rallied 80% this year, with prices surging 23% in March amid multiple bank failures in the US. Meanwhile, Ethereum’s native token ether is up 76% on a year-to-date basis. Ethereum implemented the highly-anticipated Shapella hard fork last week, opening doors for users to stake and unstake ether at will. This led to a 13% rally post-upgrade, lifting the broader market higher.
Furthermore, according to Bernstein, the new crypto cycle is still not fully appreciated, with a number of positive factors lining up. These include macro catalysts, a new bitcoin mining cycle, the continued successful upgrades of the Ethereum blockchain, and the success of Ethereum scaling ecosystems such as Arbitrum.
As the report notes, this will be the “first crypto cycle which will see participation from leading institutional investors.” The opportunity to build a new institutional financial stack on the blockchain remains a worthy goal, and serious participants remain focused on the long term.”
Traders should be aware of the increasing demand for cryptocurrencies, particularly Bitcoin and Ethereum, as they are likely to benefit from continued demand, buoyed by the macro catalysts that are aligning. Investing in decentralized assets and self-custody wallets is also recommended. Traders may also wish to consider stroking and unstroking with Ethereum’s native token from a financial standpoint.
The Bottom Line
The collapse of FTX shows the importance of decentralized assets and self-custody wallets in the crypto market. As Bitcoin and Ethereum continue to rally, traders should keep an eye out for potential opportunities and risks when investing in the market. With institutional investors becoming more involved in the crypto cycle, traders should be prepared for a new era of crypto investment.
