A lot of new-coming investors (as are those who have been in the market for a while) still keep-on wondering what has triggered the market cap of the crypto markets up, why it has since declined, and why it struggled to take upon the momentum since.
According to different resources, the trading volumes have risen dramatically since February / March this year, and the price of BTC itself has, almost, risen three-fold.
Since then, a lot of media resources and trading experts have been trying to crack the reasoning behind the spike in interest for cryptocurrency and have been busy trying to understand where will the markets head to from where it is currently standing.
Different arguments, like the coming of institutional money, the birth of IEO’s and others, have been given to the phenomenon, but none look at the fundamental reason behind the event.
Putting the technological advances that have happened since the hype of 2017 aside (those are the development of the bitcoin protocol itself, second layer scalability instruments – like the lightning network, and so on), there are a few obvious reasons, that too, account to both the financial and the technological side of the rise in trading volumes.
Those are the development and the coming to the market of what is called – web 3.0 technologies. In April 2017, one interesting project (that is the Cosmos network), held its ICO. Collecting just over 17 million USD (back when BTC was standing just above the $1100 mark). This was a highly technological product, and back at the time, not everyone seems to have understood it. Regardless of the product itself, it was (along with the other factors, of course) the main reason behind the market spike.
Investors that put their money into the future development of web 3 technologies have made a lot of money. That is, considering that Cosmos came out trading at almost a market cap of 1 billion US dollars. That led to the obvious re-arrangements of portfolios for most of these investors. Dumping a lot of them, nearly dead without it, so-called “shitcoins” and the reinvesting of the new money into developing projects. Most of them (the projects) working on web 3.0 technologies. That in turn, has led to “new blood” into the market and aligned with the rise of the IEO’s and the technological progress, gave the markets “new and fresh meat”.
All of that leads to the believe that the next rise within the crypto-market will have a somewhat similar scenario. Those are, of course, the already developing web 3.0 projects, and others – highly technological, but not yet traded web 3 based tokens: Filecoin and Polka Dot in particular, which too might give a similar lift to the crypto-market.