Things are beginning to change in the crypto industry amid the turbulence as traders no longer panic-sell their assets whenever the bear market hovers, with steady accumulation now the norm.
The CryptoCompare’s 2022 Outlook Report for the digital asset industry shows a new dimension is taking shape among BTC holders. The data indicate that the number of Bitcoin users having more than 10,000 BTC tokens in their wallets is increasing.
In addition, the report noted that this is likely due to the growing institutional adoption of the asset. Moreover, the report further detailed how the accumulation trend is changing the narrative at a time when Bitcoin failed to be the much-talked-about inflation hedge.
Meanwhile, Bitcoin’s failure to become the gold of digital assets has led many to question its relevance as a commodity suited for times like this.
In 2022, the two leading crypto assets, Bitcoin and Ethereum, will have performed in opposite directions, triggered by inflation and rising interest rates. However, Bitcoin’s volatility is stabilizing compared to the previous bear trends.
During the 2018 bear market period, Bitcoin’s annual volatility was 79%, and the current rate stands at 63%. This is a marked improvement, as traders now accumulate more tokens than before.
Furthermore, the CryptoCompare report shows that crypto token holders are beginning to come to terms with the asset’s status as a high-risk commodity. Interestingly, they now seem less concerned with the previous narrative of digital assets being a hedge against inflation.
According to the CryptoCompare platform, the recent change is not unexpected, considering the high level of speculation in the digital asset ecosystem.
Speculation Drives Crypto Stability
According to the report, speculation is one of the main factors behind the significant stability in the crypto derivative futures. Speculations helped ensure that futures faced minimal decline.
However, this is the case for spot trading, as its volumes have slumped significantly across the broader crypto market. For emphasis, spot volumes dropped 43.4% to $1.56 trillion from their previous high in November.
In contrast, futures volumes dropped 23.8% to $2.91 trillion in the same period. Furthermore, the Nasdaq-listed crypto exchange, Coinbase also hinted at the trend of institutional accumulation of crypto assets.
Coinbase’s Q3 earnings reports show that nearly 25% of the world’s 100 biggest hedge funds are moving into crypto through its platform. In addition, the firm noted that some hedge funds are beginning to “test the crypto waters.”
Hence, they might go fully mainstream once the crypto winter disappears. The same quarterly report indicates that Coinbase recorded a $2.43 loss per share, compared to the $2.40 loss analysts predicted. Meanwhile, the company’s revenue is $590 million, below the $654 million analysts expected.
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