This year, the crypto space witnessed a series of challenges and dramatic shifts that led many, including some crypto enthusiasts, to question the viability of cryptocurrency and ask, “Is crypto dead”?
Despite the negative market sentiment, backslash, and destructive criticism from crypto opponents, we believe the opposite: crypto is not dead.
In this article, we will look at the factors affecting the current state of the crypto market, examine some charts and on-chain data, and explore the challenges facing digital assets. Read on!
Is Crypto Dead?
If this is also your question, we are glad to let you know that “No, crypto is not dead.” In fact, crypto is far from dead.
Bitcoin, the father and predecessor of all virtual assets and currently the world’s largest crypto by market cap, was created in 2009 by the pseudonym Satoshi Nakamoto.
Since then, there have been yearly predictions that crypto will fall. 15 years later, Bitcoin is not only alive and doing well but has also given birth to numerous altcoins and meme coins.
Despite all the adversity and opposition that Bitcoin faced during the so-called crypto winter period, the cryptocurrency market bounced back, with Bitcoin reaching an all-time high (ATH) of $73,800+ in March 2024.
This is a clear indication that Bitcoin and all virtual assets are not dead and will not die soon.
Here Is Why Crypto Is Not Dead
As stated earlier, cryptocurrency is not dead and will not die soon.
In 2022, the cryptocurrency market was hit so hard, with the lead token, Bitcoin, trading for as low as about $15,400. This led many notable investors to exit the crypto ecosystem and declare that crypto is a bubble and will soon be extinct.
However, the cryptocurrency market experienced a strong bullish return last year, with BTC reclaiming $23K in January, then $30K in April, and consolidating around $45K in December.
Investors who bought BTC two years ago would have received a profit of over 170 percent within just twelve months. This is an indication that crypto is alive and doing well.
This year has been even more exciting. The price of Bitcoin soared to over $70K in March, reaching a new ATH of $73,800 before dropping soon after.
In April, the Bitcoin halving event took place, and as expected, Bitcoin’s price rose substantially following the event. With the market growing significantly since 2023, making a new all-time high, and also possibly preparing for a post-halving run, crypto is not dead.
Furthermore, cryptocurrency has solidified its place in the world government and economy. Directly or indirectly, most governments have benefitted from cryptocurrency.
For instance, the German government sold over $54M worth of BTC this mid-year. Although the BTC tokens were reportedly seized from pirated movie website operators, the proceeds from the sales have a way of benefiting the German economy.
Crypto is also playing a significant role in the US 2024 presidential election and possibly America’s financial future. For instance, the cryptocurrency industry emerged as the major funder of the US upcoming election, perhaps second only to party groups.
Pro-Trump political action committee (PAC) has raised over $7.4M in cryptocurrency, while Harris’ super PAC received $1M worth of XRP. Altogether, the crypto ecosystem has spent over $124M on ads for election campaigns.
More so, the major candidates in the forthcoming US elections gained more followers due to their active participation and mention of cryptocurrency. This could have been impossible to achieve if crypto had died.
Lastly, no country would waste its time on what is dead. If crypto is dead, no government would waste its time on it.
Recently, Singapore, Hong Kong, and the UAE have been making crypto-friendly regulations to solidify their presence in the crypto industry.
To wrap it up, here is how the crypto market typically operates:
The crypto market operates in a roughly four-year cycle. When the prices of cryptocurrencies are low, this will attract little interest in the market. However, as crypto purchases increase gradually, crypto prices will begin to shoot up (bull market).
Once the prices of cryptocurrencies attain a certain benchmark, early investors will become sellers to take profit. Soon, crypto supply will outpace demand, leading to price crashes again (bear market).
The Cryptocurrency Market: Current State
To better strengthen the fact that crypto is not dead, let us take a closer look at the crypto market’s current state:
- Total market capitalization: The total market capitalization of all digital assets is about $2.04T. That is about 32% down from its ATH of over $3T in 2021 but significantly higher than its $800B market capitalization in 2022.
- Bitcoin’s market capitalization: Bitcoin has a market capitalization of about $1.33T. The leading coin hit an ATH of $73,800 in March 2024 and is currently trading at around $67K.
- Ethereum’s market capitalization: Ethereum (ETH), the second-largest cryptocurrency by market capitalization after Bitcoin, has a market cap of about $314B and is currently trading at about $2,600. Ethereum hit an ATH of $4,800 in 2021.
- Numerous cryptocurrencies: Currently, there are over 2.52M cryptocurrencies across over 1,490 cryptocurrency exchanges.
- Over 560M crypto users globally: According to reports, the number of crypto users worldwide is over 560M. That is about a 33% increase from the 420M reported at the start of 2023. About 16% of the US population is already investing in virtual assets.
- VCs invested $2.5B in cryptocurrencies in Q1 of this year: Reports showed that venture capitalists (VCs) invested about $2.5B in virtual assets in the first quarter of 2024.
Other Metrics To Prove That Crypto Is Not Dead In 2024
Are you still not convinced that cryptocurrency is alive and thriving? Here are several other metrics to paint a more accurate picture of a resilient and growing crypto industry:
Metric One: Growing Numbers of Cryptocurrency Users
Increasing number of active crypto wallets
According to the 2024 Crypto Spring Report, there is an increase in the number of active crypto wallets despite the volatility and bear cycle in the market. Currently, over 400M active wallets are holding significant amounts of cryptocurrency.
It is important to know that one wallet does not mean one crypto user, as some users often maintain multiple wallets. Nevertheless, the growing number of wallets explains the expanding use of virtual assets.
Increasing number of active Bitcoin wallets
According to LookIntoBitcoin, BTC is growing in adoption and engagement. The chart below shows the increasing trend in BTC’s active wallets alongside its price.
Over the period of 2010 to 2024, we can see a clear and consistent growth in the number of active BTC wallets, with peak growths in late 2017 and early 2021 during significant price rallies.
The steady growth in the number of active wallets, even during the bearish period, is an indication of enduring interest and participation in cryptocurrency. This is a reflection of a robust and evolving user base braced for future growth.
Increase in crypto growth globally
In 2021, El Salvador became the first country in the world to adopt Bitcoin (BTC) as legal tender. In 2022, the Central African Republic followed in the footsteps of El Salvador and adopted BTC as legal tender.
Currently, the global adoption of cryptocurrency has risen, and over ten countries have accepted cryptocurrencies as a means of exchange.
For instance, in Latin America, Argentine and Brazilian traders can transact with Bitcoin and other cryptos to hedge against economic instability.
In Africa, South Africa is taking the lead in promoting financial inclusion through cryptocurrencies. In Asia, India tops the list of crypto adoption, while South Korea focused on the integration of cryptocurrencies into mainstream financial systems.
Russia is making moves to launch cryptocurrency exchanges for stablecoins.
In Europe, the Netherlands, Portugal, and Switzerland show an increasingly progressive opinion on digital currencies. The US in North America shows impressive adoption driven by retail and institutional interest.
The Dominican Republic, Chile, and Mexico are also embracing crypto to better their financial autonomy. This widespread global crypto adoption underscores the potency of cryptocurrency in the modern international financial systems.
Increase in institutional adoption
The rate at which institutions are embracing cryptocurrency is another proof that crypto is very active.
As of August this year, MicroStrategy Inc. revealed its holding of $14.7B BTC in its second-quarter earnings report with 226,500 BTC. Metaplanet added 51.7 BTC to its Bitcoin reserve, while Marathon Digital Holdings added 17,381 BTC, demonstrating significant interest and commitment to crypto assets.
Other notable companies include Tesla, with 11,500 Bitcoin holdings, Coinbase, with 9,110 Bitcoin holdings, Hut 8 Bitcoin mining firm, with 8,450 Bitcoin holdings, and SpaceX, with 8,285 Bitcoin holdings.
The data above reveals that institutional interest in cryptocurrency is very strong, and institutions are using crypto as a strategic asset to strengthen and diversify their financial positions.
Metric Two: The Rise Of Stablecoins
The rise of stablecoins has been very helpful to the cryptocurrency industry, especially in the area of payments and remittances. Stablecoins, usually pegged to a fiat currency, offer stability, ease of use, and hedge against currency fluctuations, which make them ideal for daily transactions.
Among the top stablecoins by market capitalization are Tether (USDT), USD Coin (USDC), and DAI.
Since 2021, stablecoins represented half of all crypto transaction volumes. Last March, global stablecoin transactions exceeded $40B – thanks to countries like Turkey and Brazil facing currency volatility.
Recently, PayPal rolled out its PYSUD stablecoin on the Solana blockchain technology. This further cements the growing importance of stablecoins in the financial ecosystem.
Metric Three: Regulatory Developments
Gone are the days when cryptocurrency was seen as ‘illegitimate’ or unregulated. This year, several different countries, such as the UAE, Russia, the UK, etc., have established clear regulatory frameworks and licensing for virtual assets.
Such regulatory clarity encourages the adoption and integration of cryptos into mainstream financial systems.
Even the US Securities and Exchange Commission (SEC), which has long hindered the growth of cryptocurrency, has relented. This year, the body approved the launch of spot ETF for Bitcoin and Ethereum.
More so, the SEC has dropped most of the lawsuits against crypto exchanges and crypto companies, paving the way for greater legal and regulatory certainty for the crypto industry as a whole.
More so, the EU recently passed its comprehensive crypto legislation, “Markets in Crypto Assets (MiCA).” MiCA did not only put clear rules in place for digital tokens but also gave cryptocurrency legitimacy as its own asset class.
Metric Four: Approval Of Bitcoin and Ethereum ETFs
The launch and approval of exchange-traded funds (ETFs) for cryptos, and other crypto-related financial products have significantly boosted the accessibility and legitimacy of virtual assets.
These crypto-related financial products have helped both retail and institutional investment, driving increased market stability and participation.
To wrap this section up, we can see from the metrics above that crypto isn’t dead and is not dying.
Though there is volatility, widespread skepticism, and occasional market downturns, the cryptocurrency market is very much alive.
One reason why some people, including investors, think that cryptocurrency is dead or dying is the frequent volatility and extended bear cycles, which often create price drops and uncertainty.
However, the metrics above are indications of continued interest and adoption of cryptocurrency.
Metric Five: Integration With Traditional Financial Institutions
Although cryptocurrency has always been separate from, and always seen as a rival to, traditional finance (TradFi), it is being integrated into the TradFi ecosystem nowadays.
This not only gives cryptocurrency more legitimacy as an investment-grade asset class but can make financial regulators think on how to enable cryptocurrency to continue to grow.
Integrating cryptocurrency into TradFi could increase crypto adoption for everyday use and global payments.
5 Big Challenges For Cryptocurrency
While cryptocurrency is not dead or dying, it is not free from challenges. Here are the five big challenges facing cryptocurrency:
Regulatory Challenges
One of the most significant challenges that cryptocurrency and crypto projects are facing is regulatory crackdowns.
Although the crypto industry has witnessed significant advancements in crypto-related regulation in recent years, the industry is still faced with regulatory challenges in the US, China, India, Nigeria, and other countries.
In the US, the price of BTC rose due to the approval of Bitcoin ETFs but fell soon after the SEC brought lawsuits against major exchanges like Binance and Coinbase.
Some countries have outright bans on virtual assets, some have heavy taxation on crypto-related transactions, and some countries are still skeptical of the impact that cryptocurrency would have on their local monies.
These regulatory challenges have prevented the wider adoption of cryptocurrency, and regulators may crack down more harshly on cryptocurrency in the future.
However, institutional crypto adoption would make such harsh regulatory clampdown less likely because it would also affect the traditional finance market negatively.
Market Manipulation
This is a big challenge in the crypto industry. There have been ongoing concerns about cryptocurrency market manipulation, particularly by notable influencers and large crypto holders and investors.
This has contributed largely to the fluctuations in the prices of virtual assets.
Economic Instability
Another challenge is economic instability. Being speculative and volatile, cryptocurrency is easily affected by the global economic landscape.
Factors like geopolitical tensions and interest rate hikes have been seen affecting the value of cryptocurrencies recently, and this will, in turn, affect investors’ sentiment.
Hacks and Security Vulnerabilities
Being digital, cryptos are vulnerable to hacks and cyberattacks, and this could affect future trust in cryptocurrency.
For instance, FTX went bankrupt due to a hack attack. It took Mt Gox many years to refund its customers after being hacked.
WazirX’s customers are still uncertain about being repaid after the exchange suffered a $235M hack in July. Telegram Bot Banana Gun was also a victim of a $3M hack.
This may likely continue in the future of cryptocurrencies, especially if the prices of cryptocurrencies begin to rise, and can affect confidence in the safety of cryptocurrency, painting the crypto industry with lawlessness and discouraging wider adoption.
Technological Complexity
The last major challenge facing cryptocurrency is technological complexity. Today’s leading blockchains are highly decentralized and highly complex, which makes transactions slower and more expensive.
Making crypto transfers faster and cheaper for wider adoption requires bringing together skilled developers to work collaboratively without compromising the decentralized nature of these blockchains.
While this is a challenging task, it is necessary as failure to do so could negatively affect the rate of crypto adoption.
Conclusion
Here in 2024, crypto is not dead or dying. However, crypto enthusiasts and investors must understand that cryptocurrency is very volatile and still struggling. Aside from that, crypto offers lots of potential in the future.
Crypto is thriving as an investment-grade asset thanks to increasing legitimacy, institutional adoption, real-world use cases, and technological innovation.
Despite challenges such as interoperability, regulatory crackdown, security vulnerabilities, and the inherent technological complexity of the blockchain, cryptocurrency is poised for continuous growth.
If you want to invest in virtual; assets, do your best to make proper research to enable you make informed decisions.
Frequently Asked Questions (FAQs)
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Is crypto dead in 2024?
No, crypto is not dead. Despite facing challenges such as interoperability, regulatory crackdown, security vulnerabilities, and blockchain’s technological complexity, cryptocurrency is alive, active, and growing. The prices of virtual assets and their rates of adoption are both on the rise, which are indications that crypto is not dead. Even though the future of crypto and Bitcoin remains uncertain, that does not mean that crypto is dying soon.
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Will the cryptocurrency market recover?
Indeed, the cryptocurrency market has been recovering and will recover. It’s a normal phenomenon in the crypto industry for cryptos to experience a downslide due to the bear market called the “crypto winter.” However, the cryptocurrency market is already recovering. This year, BTC rose to a new ATH, and other digital assets are being embraced by TradFi institutions.
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What is a crypto winter?
A crypto winter refers to a long period of declining prices, reduced trading volumes, and overall market pessimism in the industry.
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Does cryptocurrency have a future?
Yes, cryptocurrency has a future. Although the future of cryptocurrency is uncertain, some facts are certain. These are: Crypto adoption will increase globally. Technological advancement is imminent, and this will make crypto transactions faster and cheaper. There would be more intertwining of cryptocurrency with the traditional financial system.
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Will crypto eventually die out?
From all indications, crypto will not die out, or let us say that the death of crypto is not near. Cryptocurrency will continue to witness an increase in prices, and more people will adopt it than leave it.
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What could cause crypto to die?
As of today, nothing can cause crypto to die. Although we don’t know the future, there are pointers that crypto is here to stay. However, crypto is faced with some challenges, which include regulatory clampdown, security issues, and technological complexity. Nevertheless, these challenges are not potent enough to cause the entire crypto to die.
