One of the things that have preceded the rise of cryptocurrencies is the surge in searches related to the industry. It meant that people were excited and looking to learn and participate in the market. And this is exactly what happened in 2017. In 2017, we’ve seen Bitcoin reach almost $20,000 only to drop in 2018 after a series of regulatory changes.
And so far, searches for Bitcoin have declined as well by 60 percent since the start of the year. It has reached its lowest levels in the last two years. As for Ethereum, it shows the same trend too. Is it a good or a bad thing?
A Good or a Bad Thing?
A lot of people today are not only searching less for Bitcoin. There are also Bitcoin-related products that are on a decline in terms of sales. The sale of crypto-dedicated graphics cards is also slowing down. From $289 million in sales during the first quarter of the year, it has declined to just $18 million in the second quarter.
In addition to this, along with the decline in the search volume, trading volume has also dropped. Trading volume on Coinbase has declined by 83% since January. The market capitalization for the entire crypto market on January 7 was around $835 billion. However, today, it is only around $215 billion.
Maturity within the Market?
Does this mean that there’s maturity happening in the niche? After years of wild-west nature within the crypto market, it seemed that the regulatory changes are slowly taking effect. A great number of people invested in the crypto market without any full understanding of the market. A lot of individuals bought cryptocurrencies thinking that the price is simply going to continue going up.
Though there is still that get-rich-quick mentality within the crypto market, it is now becoming less pervasive considering the bearish market and regulatory changes.
But things are better than before considering how there are institutional investors that are slowly participating in the niche. You have the likes of ICE going with Microsoft and Starbucks. And also, you have the Securities and Exchange Commission even considering Bitcoin and Ethereum as commodities. In fact, a recent court ruling even solidified that cryptocurrencies are considered commodities.
Also, there is the possibility of having an SEC-approved Bitcoin ETF. Though the recent rejections by the agency sparked the debate whether or not there really is the possibility of price manipulation in the niche, there is a chance that a Bitcoin ETF from VanEck and Solid X could actually get approved soon.
And this could easily drive the price of Bitcoin up along with the crypto market. This could make it easier for different institutional investors to invest.
Stability and Adoptability
Stability is important in order for cryptocurrencies to become widely accepted. A lot of businesses generally refuse to process crypto payments mainly because of the volatility in its price. For these things to really happen, it is important for the industry as a whole to get rid of get-rich-quick schemes. And also, it is just as important to have regulations to keep the industry checked from possible scams.