Cryptocurrency prices all took a big hit a few months back, with Bitcoin plunging 65%+ from all-time high of US$19,390 to US$6,635 in a matter of 4 months. The other altcoins like Ethereum, EOS, Bnb are all not spared either.
Then came last month where Bitcoin and all the altcoins staged a minor rebound. For Bitcoin, its price shot up to US$9,908 before losing steam and coming down to US$8,281 recently.
With that, 1common question that many crypto investors are asking is this: “Is the Bloodbath over? Are we going to see a sustainable rebound going forward?”
Introducing the Huobi Academy of Blockchain Application
I am fortunate to get hold of a condensed version of the premium report done by Huobi Academy of Blockchain Application. Huobi Academy is a research institution focusing on technological research, industry analysis, application innovations, trend analyses and business consulting in the field of Blockchain. The report will first be made available to the attendees of Blockchain Festival Vietnam.
To be honest, it is really quality stuff and touches on many aspects of the global blockchain industry and its prospects. Most importantly, it shows the multiple reasons why the crypto market has more room to grow with the mass adoption of blockchain technology in future.
Below, we will highlight 3 crucial points that crypto investors will be interested in.
- Sentiment of Crypto Market
- Tracing back history for the bull markets
- Sneak-Peek into the future of Crypto market and its new drivers
1. Sentiment of Crypto Market
As previously mentioned, the crypto market experienced a massive sell-down from December 2017 to around Q1 2018. Many altcoins even went below their ICO prices. One possible reason was the crypto investors got rid of the digital assets due to the yearly tax season in US and Japan.
Following which, it seems that the markets started to rebound and investors began to warm up to the markets too.
In fact, according to the Huobi Research Sentiment Survey, global individual and institutional investors are currently very optimistic towards the market in the second half of 2018. 71.4% of the responders believe the total market value of crypto assets will increase more than 30% while 19% of them thinks that it can increase between 10-30%. That translates to an incredible 90% of the survey respondents who are sanguine about the crypto markets in near future.
Digging up the History of Crypto Market
For those who aren’t aware, we have already gone through 3 crypto bull markets ever since the ‘birth’ of Bitcoin in early 2009. Let’s go through them and see what we can derive from them:
|· 1st Bull Market: Apr-Jun 2011|
|Source: Coindesk, Huobi Pro Research 1||In this short 60-days bull market, Bitcoin price jumped 38x from $0.75 to $30, underpinned by the launch of Bitcoin/Sterling exchange in March 2011.
The financial media including TIME and Forbes etc. also fuelled the rally as they promoted Bitcoin as a viable investment.
However, the infamous hack of Mt.Gox exchange sealed up the whole euphoria, in which Bitcoin price plunged 92%.
|· 2nd Bull Market: Jan-Dec 2013|
|Source: Coindesk, Huobi Pro Research 2||The 2nd bull market lasted longer for around a year, when Bitcoin price increased 82x from $13 to $1,147. The main push factor of this bull market was the credit crisis in Europe surrounding that of Cyprus.
Several countries in Europe were playing with the idea of accepting Bitcoin as a consensus on peer to peer cash, leading to a sharp spike in prices.
That said, the hype fizzled out and prices came crashing down again by 82% to around $210 in January 2015.
|· 3rd Bull Market: Jan-Dec 2017|
|Source: Coindesk, Huobi Pro Research 3||The 3rd sequel of the crypto bull markets was around 4 years in the making. This time round, Bitcoin price skyrocketed from $789 to $19,343 and generated lots of hype and attention.Many media outlets were talking about how people became overnight millionaires and stuff.
Due to the consensus on blockchain and smart contracts, we witnessed loads of ICO token sales and led to the next bull run.
Unfortunately, the crypto markets were expanding at an alarming rate and definitely not sustainable. Something has to go which brought about the collapse of the crypto markets where Bitcoin price fell by 69% down to $6,000 in just under 3 months.
Sneak-Peek into the future of Crypto market and its new drivers
Here, we focus on the Huobi Academy report again and look at the new drivers will drive the crypto asset market in the future.
Huobi Research has summarized 6 key developments about the future of crypto markets (I will highlight 3 of them below):
“Use cases + Blockchain” applications can be a game-changer
Huobi research keep a close tab ofDApps built on Ethereum and found out 1 common theme.
The ones with top DAUs, except for decentralized exchange such as EtherDelta and IDEX, are mainly blockchain games. However, most of the blockchain applications are premature and limited in functionsas the current blockchain technology is still in the infant stage.
In addition, these projects have added alluring features into the applications in a bid to attract investors. Huobi research coin them as “blockchain + use cases”, where developers look for enticing use cases which can utilize blockchain technology.
Huobi Research believes that the above is not how the blockchain industry will evolve in the future. Instead, they think thatthe right way to embrace blockchain is to find common needs and real use cases, then add blockchain as a fundamental technology to optimize user experiences. In this way, blockchain technology creates real greater value and can be sustainable in the long run.
Expected growth in Blockchain user base
Currently, Huobi Research has found out thatthe total number of blockchain users is around 20 million worldwide, less than 0.3% of global population. According to We Are Social and Hootsuite, there are over 4 billion internet users globally in 2017, which means that blockchain users account for only 0.5% of internet users.
With that in mind, Huobi Research believes that blockchain users will continue to grow steadily as blockchain technology becomes more prevalent. The increase in user base is likely to stimulate the market activity, accelerate the community development and in turn, pushing up the crypto market.
To top it off, institutional investors will also regard crypto assets as a new asset class to diversify their portfolios once they become more commonplace and mainstream. This means a further increase in market depth and capacity in the blockchain space.
- Gender: From male to female
Last but not least, there is another surprise development from a survey conducted byHuobi Research. At present, about 17% of the bitcoin community users are females, a 7% increase from 10% in 2015, announced by CoinDesk. This shows that the crypto space is no longer a man’s game and is slowly being accepted and embraced by more females.
Studies have shown that female investors are more cautious and prefer sustainable and longer-term growth. Thus, it will probablylead the market to a more rational direction.In addition, females tend to have much higher spending incentives, which could create new directions for Dapp developers.
To summarize, in long term, we think the crypto market will experience a paradigm shift from investment-driven towards “invest + application” driven. Various use cases and demands will be tokenized on-chain and reflected in market capitalization of cryptos.
Besides, transactions between tokens and fiat currencies will be less and less, rather, exchanges between tokens themselves are expected to burst.
We hope that you find the information in the premium report beneficial. Once again, this report will first be made available exclusively to the attendees of Blockchain Festival Vietnam. If you wish to buy the tickets and head down for even more goodies like a US$100K airdrop, remember to use the code WRITE50 for a 50% discount.