No Frothy Hype, But Solid Growth: A Positive Sign for Crypto
Amidst the ongoing crypto bull run, some industry veterans are noticing a distinct absence of the speculative frenzy that characterized past cycles. This, according to Jason Guthrie, head of product at asset manager WisdomTree, is a good sign. Instead of relying on hyped-up use cases like initial coin offerings (ICOs), non-fungible tokens (NFTs), or DeFi lending, the market seems to be finding its footing on a more stable foundation.
“This time, we’ve continued to see the asset class gathering value, we’ve continued to see the companies that are built on this technology, growing revenue, growing client bases, continuing to innovate without really hanging their hat on one of these frankly less than useful use cases,” Guthrie told Cointelegraph at Consensus.
The absence of a singular, wildly popular use case that drove previous cycles is a departure from the past. ICOs, for instance, enjoyed a peak in 2018, raising a staggering $33.4 billion. The NFT craze also saw a surge in 2022, reaching $57.2 billion in trading volume. However, both trends eventually cooled down.
Maturity and Sustainability
Guthrie believes that the lack of a singular ‘frothy’ use case driving the market is a positive sign, indicating a more mature and sustainable crypto landscape. “I think the fact that we’re still healthy without one of those to drive it is a really, really good sign,” he said.
The current bull run has seen a surge in institutional adoption of crypto, with companies like GameStop and countries like Ukraine exploring crypto for treasury and reserve purposes. This further suggests a growing focus on practical applications rather than speculation.
Memecoin Mania: A Diminishing Force?
While the memecoin frenzy, particularly around Solana, has garnered some attention, it’s not nearly as prevalent as the hype surrounding previous crypto trends. Guthrie acknowledges the memecoin craze but sees it as a relatively minor force compared to past market drivers.
The early enthusiasm for memecoins, spurred by the launch of Donald Trump’s memecoin in January 2023, quickly fizzled out after a series of rug pulls and disappointing launches. This reinforces the idea that the crypto market is increasingly discerning and less susceptible to fleeting fads.
Looking Ahead: Innovation and Maturity
Despite the absence of a single, dominant use case, Guthrie remains optimistic about the future of crypto. He believes that there is still “a lot of innovation to do” and that the market is still in its early stages. He sees the current state of the market, with its focus on practical applications and institutional adoption, as a sign of greater sustainability compared to previous cycles.
The crypto market, it seems, is evolving beyond its speculative roots, embracing a more mature and sustainable path. As Guthrie suggests, the lack of a ‘frothy’ use case might be exactly what crypto needs to flourish.
