The cryptocurrency industry’s downward spiral continued this year after plunging for most of last year. Many crypto investors, especially those that have heavily invested in the industry believe that the market has now bottomed and that the only way now is up.
However, the cryptocurrency market has been largely flat over the last couple of months as there is still nothing much to trigger the next bull run that most traders have been looking forward to. The price of bitcoin illustrates just how the crypto industry has performed over the last 12 months.
As such, many have been wondering what could spark the next crypto bull run. There have been a few theories floated around but some are quite intriguing.
Giant e-commerce companies embrace crypto
This is one of the most popular ideas in the market. While there are several small players that have already embraced cryptocurrencies by either accepting crypto payments or launching their own cryptocurrency, the big players led by the likes of Amazon.com Inc. (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL GOOG) , and social media giant Facebook Inc. (NASDAQ:FB) are yet to do the same.
One of the top crypto investors to echo the same remarks is Binance founder Changpeng Zhao. In a chain of tweets and replies late last year, he said in one of his tweet replies that “if Amazon accepted or issued its own cryptocurrency, then this would trigger the next cryptocurrency rally.”
As of December 2017, Amazon had more than 300 million registered users, and given its primary business is online retail, it would be correct to say that everyone on that list does do shopping on the platform from time to time. Now, if only 10% of those transactions were made in cryptocurrencies, then they would account for nearly $25 billion worth of Amazon.com sales based on the company’s 2018 full-year revenue of about $232 billion.
If you try to extrapolate this correlation to the sales of search engine giant Google, and the world’s largest social networking company Facebook, plus a few others, then we probably have more than $100 billion worth of sales paid for with cryptocurrencies. The big impact won’t be the sales value, but rather the implication such a figure would have to the market regarding cryptocurrencies. It is like a big vote of approval by industry giants, and this will help bring back market confidence towards cryptocurrencies.
Tokenize real value assets
One of the biggest criticisms of the cryptocurrency market has been that cryptocurrencies lack intrinsic value. This means that their prices are mostly driven by speculation. And with the increase in uncertainty in the crypto industry, speculators appear to have established a bearish sentiment regarding its future.
Some crypto enthusiasts have noticed this weakness and in a bid to try to reduce it have launched cryptocurrencies that are backed by real assets. The most common asset that is being used to back various cryptocurrencies is gold while silver and some few base metals have also made the cut.
However, the most interesting developments in this area that will have caught the eyes of some sophisticated investors are those involving the tokenization of real estate markets, tokenization of digital advertising space and the emergence of blockchain systems that are tokenizing the diamond supply chain.
While there are more popular ways of investing in the real estate market, tokenizing the gems marketplace will certainly make diamond investments definitive and fluid by reducing the current unpredictability of prices, improving the supply chain and increasing liquidity. Diamonds are also being used purely to back various cryptocurrencies although most crypto startups prefer gold. One popular diamond-backed crypto is SparkleCoin, while GoldMint and a variety of other stablecoins continue to attract value-oriented investors. In the real estate market, ATLANT.io is one of the leading blockchain projects that seek to disrupt the market. The project allows investors from different parts of the world to invest in various real estate markets by buying tokens that represent shares of individual real estate assets.
Most real estate investors will be looking to try out this new vehicle that leverages emerging technologies and instruments (blockchain and cryptocurrencies) to create a new dynamic way of investing in the property market.
The concept of tokenizing assets with real value appears to be resonating well with the market. Now, there are several stablecoins in the market while others are still in the pipeline. Even banks have announced intentions to launch their own stablecoins, albeit for a particular clientele.
These cryptocurrencies are not only bringing real value to the market but are also providing the market with a much-needed vote of approval, at least, for the concept involved in creating cryptocurrencies. This could play a crucial part in triggering the next bull run in the market.
More governments are embracing crypto and this is a good thing
Governments across the world have softened their stance on cryptocurrencies. Some have deeply bought into the blockchain revolution and are investing heavily by teaming up with some of the world’s largest technology companies.
Australia, which has been among the leading countries in the blockchain and crypto market race, has inspired several others to join the lot. Some are understandably very optimistic though, like Dubai, which plans to implement blockchain systems in 100% of all operations by the year 2020.
The Caribbean, led by The Bahamas and the neighboring Islands has also joined the race to launch government-issued digital currencies in a bid to promoting transactional efficiencies across the Islands.
So, it is correct to say that, the cryptocurrency industry has a lot of growth drivers that could trigger the next bull-run in the coming months. Whether it will be one giant e-commerce or digital advertising company like Amazon or Google that sparks the rally it remains to be seen.
It might as well be the next stablecoin launched by one of the leading banks, or a disruptive cryptocurrency backed by real value assets like gold and diamonds. It is too soon to call the race, but the biggest guess would be an Amazon issued crypto, though government crypto isn’t far too behind either.
Author disclosure: Trading cryptocurrencies or investing in ICOs or related products involves risk. This is not an endorsement to invest in or trade any of the cryptocurrencies or stocks mentioned in this article.