Cryptocurrencies: a rapidly changing market

As the value of bitcoin exceeds $ 60,000, the demand for regulated digital asset trading solutions grows.

The recent jump is being spurred by two factors. The democratization of blockchain trading, which has become very attractive due to the very high returns it offers but also thanks to the new quality of the tools at its disposal. And so-called institutional demand, which sustains the market and reassures investors (in particular, Tesla’s investment of $ 1.5 billion in bitcoin, or the creation of a crypto fund by Rothschild). A brief overview of the novelties in this area.

Small carriers increasingly active in the crypto-currency market

Retail investors have unprecedented activity in cryptocurrency transactions. While many thought it was a fleeting phenomenon, the cryptocurrency fever lasts so much that all administrations around the world are wondering about it. regulate the activity as quickly as possible.

Advances in the regulatory framework will further promote opportunities for cryptocurrency trading in Europe. This could be done in particular through the MiCA (Markets in Crypto Assets) framework, which will be strongly focused on the rules aimed at regulating the types of crypto-currencies currently outside the scope, such as stable currencies, as well as the providers of cryptocurrency services.

But this interest is maintained first of all because demand follows supply. Indeed, blockchain technology and associated innovations now have many advantages over traditional trading. In addition to lower fees and simplified regulations, digital products open to speculation have become widely diversified. We now have:

crypto-currencies (which could be compared to FOREX),

DeFi tokens (tokens issued by blockchain startups, comparable to shares)

NFTs (unique and non-interchangeable digital objects which are related in particular to the art market)

and even some companies that offer investment in rental real estate via the blockchain

finally for the more traditional ones, the classic equities trading is even made possible and simpler thanks to the reproduction of their price on the network synthetix

Supply inevitably follows demand in turn, and these innovations, which are attracting more and more customers, allow the platforms that host transactions to diversify, simplify and greatly democratize.

Platforms such as Binance, FTX, Coinbase even offer future trading services with leverage, “staking” for savers with returns of 5 to 15%, and this on hundreds of different assets, including prices are increasingly decorrelating from bitcoin.

Adapted tools to help cryptocurrency investors

In addition to the trading platforms called “exchanges”, which we talked about above (Binance, FTX, etc.), the variety of crypto trading tools available to individuals has exploded. For example, at the crossroads with artificial intelligence, the tools of trading signals now make it possible for independent traders to anticipate price movements. These services recognition of graphic models, used until now for stocks and forex now extend to crypto assets.

Then, the information calendars of ICOs dedicated to the crypto market have multiplied on the web allowing Internet users to access the information necessary to invest in promising projects. This intermediary system between a kickstarter and a classic IPO democratizes investment in blockchain companies. The calendars also prevent network updates such as the creation of a fork (cloning of a network to introduce modifications: litecoin is a fork of bitcoin), or a modification of the protocol, the most awaited of which is the EIP. 1559 from Ethereum which should arrive in the coming months.

There are also solutions that allow you to automatically declare your crypto capital gain, to centralize investments on a single medium or even to store your assets on a physical medium to extract your assets from the platforms for protection and discretion. The latter method is used by long-term investors who want to protect large sums of money from computer attacks. This is equivalent to removing an asset from the network and turning a usb key into a real gold bar.

Institutional liquidity and general public acceptance: the winning duo

The crypto-currency ecosystem therefore has nothing to do with that of 2017. Technologies and fundamentals have radically evolved to become mature to the point of attracting renowned players. During the previous bullish phase of the market, small transactions made by retail investors increased the volatility of the price of bitcoin.

Without much underlying liquidity, prices moved in a haphazard fashion, alternately skyrocketing and collapsing, as traders shifted liquidity into or out of the crypto ecosystem.

The current rally in cryptocurrency prices has occurred in a different context. Institutional investors are slowly but surely entering the crypto ecosystem. Their presence has brought much-needed liquidity to the cryptocurrency markets, making them less likely to experience large price swings due to small transactions. The stabilization of the price, and the increase in volumes support the confidence of investors in the market who are much more resistant to the temptation to sell during corrective phases such as that of January or the last one at the end of February.

As such, we note that the volume of bitcoins available on exchanges has never been so low in history and continues to decline. This fundamental information indicates that the owners of bitcoins are withdrawing them more and more from the market to keep them for a long time. Confidence in this new asset is therefore at its highest and the price should continue to rise.