Are the Bulls Back?
Is this a “bull market disbelief” rally or the real thing? It depends on where you sit in the current positive run that Bitcoin but other cryptocurrencies are experiencing this week. While some analysts are hesitant to label the market “bull,” retail traders can look to recent reports that demonstrate continued confidence in the growing adoption of digital coins into the mainstream.
On August 18, Chainanalysis revealed that worldwide adoption of cryptocurrencies jumped over 880%, according to its 2021 Global Crypto Adoption Index. Vietnam, India, Pakistan, and Ukraine ranked in the top four, respectively.
“Our data shows that growing transaction volume for centralized services and the explosive growth of DeFi are driving cryptocurrency usage in the developed world and in countries that already had substantial adoption, while P2P platforms are driving new adoption in emerging markets,” the report states.
“Our biggest question for the next twelve months is how much adoption will continue on those platform categories compared to new and emerging models we haven’t seen yet. The clear takeaway though is this: Cryptocurrency adoption has skyrocketed in the last twelve months, and the variation in the countries contributing to that show that cryptocurrency is a truly global phenomenon.”
News from United Wholesale Mortgage in the U.S. indicates that more businesses are taking notice. In earnings call on Monday, its CEO announced it would start accepting Bitcoin by the third quarter of this year.
“We’ve evaluated the feasibility, and we’re looking forward to being the first mortgage company in America to accept cryptocurrency to satisfy mortgage payments,” said Matt Ishiba, CEO of the second-largest mortgage broker in the country.
“I think we’re starting with Bitcoin, but we’re looking at Ethereum and others,” Ishbia said later in an interview with the Detroit Free Press.
Traditional financial institutions continued to move toward adopting digital currencies. Fortune.com reported recent filings with the U.S. Securities and Exchange show Wells Fargo and JP Morgan are partnering with New York Digital Investment Group (NYDIG) to offer passive crypto investment opportunities to their clients. The two mega-banks joined Morgan Stanley, which began offering their wealthier clients access to Bitcoin investment opportunities earlier this year.
Investment in mining also made headlines this week as filings revealed that “Blackrock, the world’s largest asset manager with $9 trillion in assets, has taken significant stakes in two bitcoin miners, 6.71% in Marathon Digital Holdings and 6.61% in Riot Blockchain,” Fortune said.
“Blackrock’s disclosure is part of a larger trend of traditional financial institutions and investors ramping up their exposure to crypto through traditional equity,” the Forbes contributor noted.
On top of all of this flurry of activity came an announcement Thursday that Coinbase was adding crypto to its balance sheet. “We recently received board approval to purchase over $500M of crypto on our balance sheet to add to our existing holdings,” CEO and Co-Founder Brian Armstrong tweeted. “And we’ll be investing 10% of all profit going forward in crypto. I expect this percentage to keep growing over time as the crypto economy matures.”
Retail traders also contributed to the steady glow of green candles this week. Cardano (ADA) made news as it edged out Binance to become the number three coin in market capitalization. Dogecoin rallied, boosted by strong support on social media plus news that its foundation will be resurrected, spearheaded by Ethereum co-founder Vitalik Buterin. Ethereum, Bitcoin, Polkadot and other coins continued a steady climb into green territory.
So, is the bull market back? Or is the bull market in disbelief?
On-chain analysis at Glassnode took a critical eye to the market in its weekly report, citing miner recovery, strong exchange outflows and large accumulation as signs that “the scales have most likely now tipped in favour of the current market conditions being a bull market disbelief rally.”
Long-time traders know that the cryptocurrency market can be a rollercoaster ride. Prices may fluctuate and critics quick to jump ship. But sentiment shows that digital coins continue their upward climb toward worldwide adoption.
Joyce Pavia Hanson