Cryptocurrencies came to the spotlight in 2017, died off for two years, rose again in 2020 (after the Covid-19 breakout), and have since remained on the global stage as an innovative macro asset alongside gold, stocks, bonds, and traditional currencies.
However, with this newish asset that can’t be physically held, there’s been considerable criticism about its feasibility, reliability, and viability moving forward. Moreover, because cryptocurrencies are generally quite volatile, whenever prices drop, sentiment falls and people start FUDing and claiming that crypto is dying and/or crypto is dead.
So let’s explore this question and provide data and statistics that challenge this crypto is dead narrative.
Is Crypto Dead 2022?
Analyzing The Market Cap
Historically speaking, cryptocurrencies in 2022 have fallen off their 2021 peaks. However, the market valuation is still significantly higher than in previous bear markets, such as from 2018-2019.
For example, the current market cap for all cryptocurrencies stands at around $900 billion dollars. But during previous bear markets, the market cap ranged around $250 billion, only rising to $500 billion during run-ups to the bull market.
This means despite the negative sentiment and macroeconomic fundamentals, there’s still significantly greater investor interest in cryptocurrencies in 2022 than in previous down years like 2018 and 2019.
Additional analysis will tell you that along with blockchain and crypto developments such as faster layer 1s and Ethereum moving to PoS, the rise of the metaverse and skyrocketing interest in NFTs are only additional catalysts that will only increase crypto’s adoption.
With all these developments happening in real time, there’s a very small chance that crypto could be perceived as dying. And that’s only if one is analyzing recent price performance rather than technological advancement, Web3 development, metaverse, NFTs, and the various success of crypto marketing to developing and developed countries.
Analyzing Blockchain, Metaverse, & NFT Adoption
Blockchain is a technology that has served as the catalyst for crypto adoption and investment. Blockchain technology is also a revered technology that has attracted significant investment and interest from companies such as Google, Apple, Samsung, and institutions such as BlackRock, Fidelity, and JP Morgan, as well as countries such as the United States and China.
Here are some statistics to put sand on the crypto is dying and blockchain will go down with it too rumors. Worldwide spending on blockchain solutions is expected to grow from $4.5 billion dollars (2020) to an estimated $19 billion dollars by 2024.
Moreover, constant surveys from Statista and Deloitte, speaking with global businesses and executives constantly reiterate their interest in investing in blockchain. Blockchain is useful for financial, healthcare, e-commerce, and agricultural sectors to name a few. Simply speaking, with all the VC funding (over $2.3 billion as of 2020), the industry is simply not going away.
Another factor propping up crypto is the metaverse. The metaverse is a digital virtual reality that will need high-speed internet, blockchain, NFTs, and different currencies for payment. In this aspect, cryptocurrencies should mesh well with the metaverse.
And companies have realized the metaverse’s potential. That’s why companies like Meta, Apple, Google, Microsoft, Nvidia, Tencent, Roblox, Shopify, Epic Games, and Nike are investing in it and building out their digital reality business strategies.
However, it’s still early days. So despite interest in the metaverse dropping by almost 50% according to Google Trends, this is a time when the quiet money and big players are getting in and focusing on products, solutions, and services.
Lastly, crypto is not dead because of NFTs. In 2018, when crypto crashed, there was very little institutional and company interest, the whole market was speculative, and there were few use cases. Moreover, there were no NFTs. However, now that NFTs have hit the mainstream and have gained similar attention as the metaverse, it only gives the industry more strength and momentum moving forward.
For example, here’s a timeline of unique wallets buying NFTs. It speaks for itself in that the market for NFTs has risen spectacularly since 2017. In 2022, however, these numbers have dropped off. But, the market is maturing, and the reason for the current dampened activity is because of the weakening global economy.
NFTs and crypto are not going anywhere. Young folks love NFTs and crypto and will keep buying them to show off on their social media profiles. For example, by using NFT profile pictures (NFT PFPs).
Dead Cryptocurrencies & Dead Coins
2022 saw the beginning of a new market, but it wasn’t until after the infamous Terra Luna-UST stablecoin blowup that the industry really got brought to its heels. For example, after the Terra Luna market crash, a domino effect got set off which resulted in the failures of several cryptocurrencies, namely LUNA, UST, and CEL (Celsius’s native token). These are the primary cryptocurrencies that have suffered the most during the 2022 crypto crash.
(LUNA price performance 2022)
(Celsius Network token price performance 2021-2022)
However, it’s important to note that although these coins have fallen by over 80% from their highs, they are still active on exchanges, and the projects are continuing.
Moreover, this comes despite regulatory clampdowns, legal authorities coming after their assets, and investor anger at management (Do Kwon & Alex Mashinsky). Both of these projects may survive, but it will take time to find out, potentially over a year or two.
Terra Luna’s stablecoin UST is pretty much dead and has been knocked out of the global stablecoin conversation as a case study for why a certain type of algorithmic stablecoin should not be tried again, especially the way Do Kwon and Terra planned it.
For now is a certainty, that this model of cryptocurrency is dead and gone. It will serve as a warning for other projects and creators that want to enter the stablecoin market without having sufficient reserves.
In conclusion, the list of dead cryptocurrencies hasn’t grown that substantial during the current bear market. It will take more time to figure out which projects will survive. But for now, it seems like the major blockchain players, layer 1s, layer 2s, Web3, infrastructure, DeFi, will all survive as long as they edit their tokenomic arrangements to cater to weakening economic activity and lower excessive leverage.
Is Crypto Mining Dead?
Ever since Ethereum changed its network consensus mechanism from PoW to PoS, there’s been a debate about the future of crypto mining. Of course, for PoW cryptocurrencies like Bitcoin and Dogecoin, mining is a necessary input for the network’s continuation.
Moreover, mining hasn’t stopped too. This is proven by Bitcoin’s increasing hash rate, which measures the difficulty of mining blocks and the overall computing power in the network. It’s currently at an all-time high for Bitcoin. Thus, dispelling the notion that crypto mining for Bitcoin is dead.
Crypto mining is also a profitable industry where miners who operate pools and mining hardware can earn a return on their investments to mine Bitcoin. But recently, the returns that these miners can earn have indeed fallen. However, it’s not fallen to the point where the market is gone or on the brink of extinction.
Dispelling The FUD: Why Crypto Is Here To Stay?
The reasons stated above, such as the $800 billion dollar market cap, and institutional interest in blockchain, metaverse, and NFTs, can only mean that crypto is here to stay. If crypto was dead, banks such as JP Morgan, asset managers such as BlackRock, and the internet companies such as Google wouldn’t be creating teams to explore the tech, nor would they be opening up the channels for their clients to invest in digital assets directly.