Arca: “That’s Our Two Satoshis” – Waiting For Demand to Return to Crypto
While the stock market has seen considerable volatility in the past few weeks, the crypto market has been quiet. There haven’t been any major moves.
Compare that to the bond market. 30-year Treasury bonds issued 3 years ago have dropped 50 percent in value thanks to sharply rising interest rates. That kind of move makes crypto look more interesting, especially with so little interest in it after last year’s collapse.
Ultimately, all markets are driven by supply and demand. The latest market events haven’t yet created any change in demand for cryptocurrencies. When that changes and demand rises, prices can truly take off.
On the supply side, some cryptos, including industry leader Bitcoin (BTC) have a set rate of supply growth. Many see Bitcoin moving higher next year, following its next halving.
That’s the process when the supply of new bitcoin from mining gets cut in half. Prior halving periods have kicked off massive rallies for Bitcoin. And where Bitcoin goes, smaller cryptocurrencies tend to follow.
For crypto projects that don’t have supply constraints, the lack of demand also hurts. That’s because issuing new supplies without demand would cause prices to drop. For some crypto projects that need funding, there may not be a choice.
For crypto projects that are looking to build a lasting platform, however, issuing new tokens or coins now doesn’t look attractive.
