It was another mostly stable week for crypto prices, as bitcoin has traded between the $19,000 to $21,000 range. The market is still figuring out where to go next. This in the aftermath of a number of major liquidations of over-leveraged traders and crypto funds. However, it appears that this string of forced selling could be over for now. Many who came into the crypto market during the hysteria around DeFi apps and NFT last year have mostly left. Only the true believers in this technology appear to be staying the course.
It’s possible that the crypto market will continue to bleed a bit more over the rest of the year. This is as holders will need to be patient to weather the entirety of the bear market. For now, it makes sense to continue the search for the projects that will define the next bull market. Also, to help turn things around. Low transaction fees on various crypto networks indicate a general lack of activity and interest in these protocols. However, there are still signs that this market will continue to grow over the long term.
The Tourists Have Left the Bitcoin Market
June was one of the worst months on record in terms of bitcoin’s price. The cryptocurrency dropped roughly 38%, as many of the new buyers from 2021 decided to exit the market. You’d have to go all the way back to 2011, when the Bitcoin network was barely two years old, to find a worse monthly bitcoin price performance. According to crypto research firm Glassnode, the general lack of on-chain Bitcoin activity is a sign that there aren’t many so-called “tourists” left in this market. Instead, the long-term holders of last resort are the ones preventing the price from taking a further tumble.
The goods news is that various on-chain metrics indicate that the people who are buying right now are the types of people who have also bought past market cycle bottoms. Notably, this phenomenon one you find among both large and small holders of bitcoin. Additionally, those who are buying now are taking their coins off exchanges and putting them in long-term cold storage wallets. The level of activity happening on Bitcoin today is similar to that of the deepest parts of previous bear markets. While past results are not necessarily indicative of what will happen in the future, this could be a good sign in terms of the bitcoin price finally finding a bottom.
Millenials Own More Crypto Than Mutual Funds
According to a new report from Alto (PDF), millennials are treating cryptocurrency as credibly as more traditional avenues of investment. In fact, there are more millennials investing in cryptocurrency than mutual funds, which have traditionally been the main vehicle of investment for past generations. When it comes to comparing crypto assets to individual stocks, roughly the same share of the millennial generation is investing in both asset classes.
Among millennials that have Individual Retirement Accounts (IRAs), 70% have digital assets in their portfolios. However, one should note that the millennial generation has also found it more difficult to invest overall due to factors such as rising costs of living and massive student debt burdens. Generation Z may be even more open to the crypto revolution, as 51% of that generation was found to prefer receiving half of their salary in digital currencies instead of government-issued currencies.
Ethereum Gas Fees Lowest Since 2020
One of the biggest stories of 2021 was the explosion in the average cost of transacting on the Ethereum network. Various DeFi protocols and NFT projects became popular. Then there seemed to be no price that was too high for users who wanted to make a transaction in the next mined block. The high costs created by large demand and Ethereum’s limited block space created the space for other chains, such as BNB Chain and Solana, to gain traction as lower-cost, more-centralized alternatives to Ethereum.
Of course, now that the market is in shambles, there is much lower demand for Ethereum transactions. Ethereum users have paid more than $100 for various smart contract interactions in DeFi apps in the past. Its these sorts of blockchain transactions that now cost around $15 or less. In fact, a simple transfer of ETH only costs a couple of dollars. Popularity of NFTs has declined dramatically throughout 2022. However, this use case still accounts for a large percentage of the overall activity on the Ethereum network. For example, OpenSea is still the biggest gas guzzler, accounting for more than 10% of total network activity.
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