The cryptocurrencies market has grown rapidly in recent years. It is the first bull market in which major institutions have officially dipped their toes into the crypto market. But many institutions have remained completely sidelined, and Cointelegraph writes that there is a reason for this.
“Crypto has no intrinsic value”
The crypto paper spoke with Bloomberg crypto analyst Jamie Coutts at the Australian Crypto Convention last weekend. He emphasizes that the misconception that “there is no intrinsic value in blockchain” is still floating around. “These asset managers own stocks, such as Amazon and Facebook, which saw no growth for the first time in several years. Facebook also had no profit in its early years and was also seen as a company with no intrinsic value,” argues the analyst.
Yet he recognizes intrinsic value in the network effects. The networks, he says, are growing, and the value of the assets is determined by the number of people using the networks.
On-chain data confirms this. A while ago we wrote that some institutions are still interested in the young market, despite the fact that it has fallen sharply. On the contrary, companies that provide important infrastructure are converting record amounts. That indicates that the networks are still being used, and that the big money still sees the point in investing in them.
Regulation of cryptocurrencies no cause
Coutts couldn’t quite put his finger on the problem. According to him, a lack of clarity around regulation is not the problem. By the time cryptocurrencies became taxable property, the market was already regulated, he says.
Instead of such aspects, according to Coutts, the cause lies more in a kind of ‘fear of the unknown’. Even professional investors don’t feel the need to delve into the market, which translates into a kind of anxious sitting on the sidelines. “It is best to understand that currency depreciation and technological innovation are big trends that bitcoin (BTC) and cryptocurrencies are part of,” said Coutts.
