3 Trends That Suggest Crypto Market Will Grow

Stuart Popejoy, Co-Founder and CEO of Kadena, talks about the three trends that show the crypto market is poised for continued growth, as well as how crypto investors may want to evaluate stablecoin Terra’s recent crash.
 
Why are crypto prices falling?  
 
A macro breakdown caused by factors including tech stocks struggling, the war in Ukraine and inflation/interest rate worries has precipitated a flight to safety out of more speculative stocks. Additionally, Bitcoin (BTC) was directly implicated in the Terra debacle. Terra was buying Bitcoin to stabilize Luna in the lead-up to the crisis, which caused a large one-time selloff of Bitcoin.
 
How should crypto investors evaluate Terra’s recent crash? 
 
I think it's time to look at the fundamentals of crypto projects and start moving away from projects that use inflated returns to drive up the value of the protocol. Luna was supposed to succeed because of the returns and the hype, but once that collapsed, there was nothing left. Meanwhile, the projects that have weathered the storm have done so because their value comes from their differentiation or execution in infrastructure and services, for example.
 

Despite falling prices, do you see crypto becoming mainstream? Where do you see crypto adoption really picking up?
 
This isn't crypto's first bear market and won't be its last. We’re seeing a downturn with traditional assets as well, which in many ways signifies the maturation of digital assets as they ebb and flow in tandem with the economy. This is a correction that follows the buildup of last year, no different than how tech is correcting after its huge growth during the early period of the pandemic.
 
What are the main roadblocks or barriers to crypto becoming more mainstream? 
 
Crypto is still hobbled by problems that first showed up in 2017. There are still too many security and scalability problems with now-legacy platforms, and the consequences have been losses in the hundreds of millions. Platforms like Kadena are working hard to fix this by bringing new solutions with scalability and safety built in.
 
Are there trends in the crypto space that investors should be paying more attention to right now? 
 
Three trends show the crypto market is poised for continued growth:
 
First, there’s a huge talent migration from big tech into crypto. Originally in crypto, you really only had cryptographers and similar specialists getting involved. But with the huge growth in assets under management and the many innovations in this space, we’re seeing some really big players coming over from traditional tech for the first time from companies like Amazon (AMZN), Apple (AAPL) and Meta (FB).
 
Second, institutional funding is shifting to crypto projects. Traditional venture capital is flatlining while more money is coming into crypto. Crypto as a whole raised $25 billion last year. In March alone, crypto startups in infrastructure, NFTs and gaming received more than $3.5 billion in VC cash – a record high. The amount of money coming into the space and making new projects happen is incredible.
 
Third, penetration of crypto assets is increasing. Fidelity 401Ks now make it possible for mainstream investors to acquire Bitcoin. Currently, it’s primarily the blue-chip crypto assets like Bitcoin and Ethereum that are gaining this type of partnership traction, but eventually we’ll see a broader set of DeFi, NFTs and many other assets offered up in new and exciting ways. This is just the beginning.

This interview originally appeared in our TradeTalks newsletter. Sign up here to access exclusive market analysis by a new industry expert each week. We also spotlight must-see TradeTalks videos from the past week. 

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

BTC AMZN AAPL META

Other Topics

Bitcoin Markets Investing