The Arrival of Crypto’s Real Economy

Crypto is entering its true economic phase, suggests WisdomTree’s Dovile Silenskyte. Bitcoin is expected to serve as a cornerstone for macro hedging, while the future entails a wider and more functional market guided by utility.

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Key Insights:

• In August, Bitcoin reached new heights, surpassing $124,000, showcasing a significant integration into global finance.
• This latest rally is distinct as it does not elevate the entire cryptocurrency market. Investors now focus on utility, and the CoinDesk 20 Index is gaining traction for distinguishing valuable assets from speculative ones.

Institutional Engagement

Physical bitcoin exchange-traded products (ETPs) drew almost $38 billion in the last year, with total assets under management surpassing $165 billion. Hedge funds and corporations are accumulating Bitcoin extensively, and the U.S. has even established a strategic Bitcoin reserve. Liquidity and infrastructure improvements are evident, with futures now including major cryptocurrencies.

Policy and Market Dynamics

With impending tax cuts and a U.S. debt exceeding $34 trillion, many investors are seeking refuge in Bitcoin against potential dollar depreciation. Projections place Bitcoin’s value at potentially $250,000 by 2030.

Altcoin Landscape

Notably, this market phase isn’t buoying all cryptocurrencies. Success is reserved for protocols yielding tangible benefits, with projects lacking fundamentals losing visibility.

Conclusion

The crypto landscape has shifted: Bitcoin stands firm as a key macro hedge, but the emerging market will be comprehensive and functionality-focused.