The team at Blockchain.com, a leading digital currency wallet provider, trading platform, and block explorer service, notes that as the crypto-asset space exceeds the $2 trillion market value level, many people might be wondering just how much longer and higher will these prices go in the long-term.
The team at Blockchain.com writes in a detailed blog post that they are focused or committed to maintaining an “overall positive medium-term outlook” because of the following key reasons:
- Macro: crypto is “arguably the best-positioned asset class given the current fiscal and monetary environment”
- Wall St: many institutions are “still in the early stages of making available cryptoasset products and services to their customers”
- Regulation: positive catalysts “such as an SEC-approved bitcoin ETF are still on the horizon, while continued progress is seen locally in jurisdictions like Wyoming on DAO legislation”
- Public sector: major investment players that “we expect to eventually embrace crypto, including governments and sovereign wealth funds, have not entered crypto in a meaningful way to date”
- “Digital gold” undervalued: bitcoin “remains less than 10% of the total market value of actual gold”
- Technology maturity: development of “various blockchain technologies and protocols, including DeFi, DAOs, smart contracts, etc. is still in the early days but rapidly advancing”
- Adoption penetration: we “estimate a critical mass of approximately 100 million total cryptoasset owners and 1 million DeFi users at present, and believe billions of people will ultimately own and use cryptoassets”
The comprehensive Blockchain.com report pointed out that the medium-term outlook is “very constructive” but there are still some issues that remain and price volatility in the future should be expected. The report also mentioned that the incredible rise of Dogecoin (DOGE) is “simultaneously exciting and frightening.”
Blockchain.com’s report went on to share what they consider to be the main “driving” factors of the nascent cryptocurrency markets. They also provided a thorough analysis of Bitcoin or BTC on-chain activity.
As noted in the report:
“Ethereum (ETH) set another new USD all-time and in early May crossed the $3500 level for the first time; ETH remains well below its all-time high in BTC terms at ~.05 vs. ~0.14 in July 2017.”
The report added:
“Bitcoin (BTC) had its first down month since Sept. 2020 and its market value dominance level (~45%) has declined to levels not seen since 2017. Broader financial markets were mixed: stocks were up again by ~5% for the month; long-dated US treasuries and gold bounced back(+2% and +3%, respectively) while the US dollar weakened (-2%).”
The report further noted that the “frenzied” price action in Dogecoin (DOGE) and other digital assets with “little traction or track record has pushed cryptoassets to a combined market value well in excess of $2 trillion while raising crypto price sustainability questions.”
As stated in the report, “dismissing” Dogecoin as the joke it was when it was first introduced could be a “mistake.” The Blockchain.com blog post pointed out that institutions that move slowly “might be unsettled and not move into crypto at all if there is too much newfound uncertainty atop the cryptoasset leaderboard.”
While commenting on the Bitcoin network activity, the report noted that BTC continued declining for the month of April 2021.
As confirmed in the report:
- The average fee per transaction “was $30 in April; April 21st saw a new all-time high of $63/transaction”
- Estimated hash rate “dropped 1.5% in April, which led to a decrease in the number of confirmed blocks” (Hash rate is “an estimated figure; a more accurate view of hash rate levels can be seen over a longer period of time …i.e. 7-day average”)
As mentioned in the report:
“While the broader crypto bull market continued in April, Bitcoin (BTC) had its first monthly decline since September 2020. As of the end of April bitcoin was down 2% for the month.”
Meanwhile, Ethereum (ETH), the world’s second-largest crypto, set another new USD all-time and “in early May crossed the $3500 level for the first time.” But ETH remains “well below its all-time high in BTC terms at ~.05 BTC vs. its record level ~0.14 BTC in July 2017.”
The report added:
“Ethereum is approaching an almost 2000% gain over the last two years with Bitcoin at +906% during the same timeframe.”
Blockchain.com’s market update also noted that stocks kept their “defiance of gravity and were again up (S&P500 +5%).” February and March’s 2021 “big losers” managed to reverse their course last month, with “long-dated US treasuries up 2% and gold up 3% for the month,” the report revealed while adding that the the US dollar “reversed its strength since the start of 2021 and softened -2% in April.”
You can view the complete report here.