Vincent Boy, Market Analyst for IG France paints a comprehensive picture of the opportunities and risks associated with the cryptocurrency industry and the adoption of Blockchain technology.
Opportunities related to payment facilitation
The cryptocurrency sector continues to interest both individuals and companies, and it is especially on the private side that many opportunities are being created. IG France points out that ” many players in the traditional economy are investing more and more heavily in the sector “. These players are offering more and more web3 services, whether in the payment sector or in cloud activities such as the partnership between Google and Coinbase.
In this emergence of blockchain technology, we find the debates on CBDCs, these central bank digital currencies that we often talk about. GI France underlines the advantages of these new forms of currency, such as the reduction of the risk of fraud or double transaction as well as the reduction of costs, while being aware of the more centralized nature of this offer. Among the most striking examples is the eYUAN whose use during the Winter Olympics reached more than 300,000 (equivalent) dollars each day. Currently, more than 261 million wallets have been created, 12 cities have adopted it and more than 13.7 billion dollars have circulated via eYUAN.
Market risks
Despite the emergence of blockchain technology, it is mainly the companies behind Ripple or Chainlink that collaborate with traditional payment systems like SWIFT, offering centralized alternatives but going through the blockchain. Bitcoin, on the other hand, is more forgotten by institutions and companies, partly due to its very speculative image and its decentralization which can get in the way. Bitcoin therefore continues to defend the same values as in 2008, against a centralized banking and financial system, it remains the decentralization solution designed for the people and without an intermediary.
In addition, the cryptocurrency market remains very decorrelated from the performance of digital assets, at a time when Binance and crypto.com settle in France and invest hundreds of millions, their native token continues to fall. Ethereum meanwhile has not seen a particular revaluation after “The Merge”, even if its monetary creation has largely fallen since this event and the creation of new tokens is much slower than if Ethereum was still in PoW .
This growing interest on the part of institutions and companies can partly explain the fall of Bitcoin’s dominance in the cryptocurrency market, even if it remains very dominant, it is likely to see a desire on the part of the private sector and public to push towards other payment systems and to forget Bitcoin.
IG France therefore shows a bear market situation, while highlighting the adoption of the technology by many giants, such as EDF and Société Générale.
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