Bitcoin, Ethereum And Stablecoins Poised For A Massive Takeover: Bloomberg
Bitcoin price has been in a slump since the start of 2022. The crypto market has shed a lot of value along with traditional assets in reaction to several macroeconomics events. Despite this, analysts are still highly bullish on Bitcoin and Ethereum, the two market-leading cryptocurrencies, as well as stablecoins. The fundamentals of these digital assets will sustain them to new highs this year.
Analysts name key crypto market fundamentals for 2022
In its Bloomberg Crypto Outlook for February, analysts at Bloomberg Intelligence (BI) have named the key digital assets that will continue to dominate the market in 2022. These include Bitcoin, Ethereum, and stablecoins which they name crypto dollars. The team of analysts led by senior commodity strategist Mike McGlone is optimistic for these digital assets because of their fundamentals.
Bitcoin, Ethereum, and crypto dollars comprise about 70% of the total crypto market cap. Purging 2021’s excesses may continue, but we expect the market cap of these three stalwarts to just keep going up, BI notes.
The fundamental that stands out for Bitcoin is its limited supply of 21 million. With a reducing supply and increasing market demand for Bitcoin, Bitcoin (BTC) is on its way to becoming a global digital collateral BI notes. They add that the pioneer cryptocurrency is uniquely positioned to continue surging in price as well, and will continue to sustain its position at the top despite thousands of new cryptocurrencies popping up in the crypto market.
Ethereum and Stablecoins also poised to outperform
Ethereum’s strongest fundamental noted by the report is its broad ecosystem that facilitates, among other things, a large market share of NFTs and crypto dollars in the crypto industry. The increasing use of stablecoins minted on the Ethereum blockchain strongly supports the ETH price.
Meanwhile, stablecoins, which are almost all pegged to the dollar, will continue to grow in dominance due to the ease they afford for users in making dollar payments. BI points out the growth of the top six crypto dollars, noting that between the start of 2021 and February 2022, their combined market cap has increased about 5x. The top stablecoins including Tether USD (USDT) and Circle’s USDC have a combined market cap of around $170 billion.
BI’s outlook is not so bullish for the rest of the crypto market. The analysts highlighted that the more than 17,000 other cryptocurrencies in the market have failed to show significant use cases and were largely just speculative.