For most people, the crypto market still seems irrelevant. Since the bubble burst, widespread attention has not returned. Occasionally a significant increase in the Bitcoin price makes it into the mass media, but it remains that way. The issue is not present to those who do not continually engage with the sector – which is probably over 95 percent of the population.
Crypto adoption: things are going better than ever
At the same time, it can be observed that companies and institutional investors are increasingly turning to the topic. For example, Siemens is issuing a bond on Polygon and making payments via JPMorgan stablecoin, while Deutsche Bank is about to issue crypto ETPs. At the same time, Lufthansa launched a loyalty program through NFTs. For those who follow the sector, this is not unfamiliar news, as such reports are now occurring on a daily basis.
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It is precisely this vacuum between public perception and actual fundamental developments that has not been larger since 2020 before the last rally. From an investor’s perspective, this creates a favorable environment, a so-called sweet spot. Institutional investors haven’t gotten in yet, and the general public doesn’t have an eye on the market.
Macro location: The perfect starting position
The sweet spot also exists macroeconomically. After the bubble burst and the massive hikes in key interest rates, valuations fell sharply. Although prices have recovered slightly since then, they are still well below the highs of the hype year of 2021.
At the same time, it is foreseeable that new liquidity will drive the markets higher in the coming months. Here, too, we are in a favorable environment: all negative macroeconomic events are, at least in all probability, behind us, and with falling inflation and the massive debt problem, the next wave of monetary expansion is upon us.
Favorable reviews attract
For every euro, dollar or Swiss franc you invest in a protocol like Ethereum, Chainlink or Polygon today, you get more network and more mature projects. This means that the protocols are fundamentally closer to the value they unjustifiably had at the time, hype year 2021.
The overvalued prices at the time are now being recaptured in a fundamentally justified manner. Current price increases are not the result of hype, but of legitimate catch-up effects, as great progress has been made in topics such as compatibility, scalability or the creation of use cases.
Crypto Regulatory: The Worst is Over
The main attack against crypto in the US appears to have reached its peak. The aggression of the US Securities and Exchange Commission (SEC) is leveling off, and with the conviction of Sam Bankman-Fried, the regulators also appear to be slowly finding peace. Important court rulings between the crypto sector and the SEC, such as Ripple or Grayscale, have gone in favor of the crypto players.
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At the same time, Wall Street asset managers are on the verge of establishing facts and legitimacy for the sector with Bitcoin Spot ETFs. Meanwhile, Hong Kong is opening up more and more so that the Chinese are not left out, and the EU has adopted a framework for crypto regulation called MiCA.
It seems like the worst is behind us. Despite remaining regulatory challenges, the situation is proving favorable for investors. The worst storm is over and the clouds are clearing a little – a sweet spot for investors with foresight.
If you want to know why a Bitcoin price of $100,000 is almost inevitable by 2025, you will find the answers in this article.
Disclaimer: This article reflects the author’s opinion only. These are not buy or sell recommendations.
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