Will Web3.0 tokens become the next hot spot? Market data tells you the answer

Although crypto assets have generally fallen recently, the prices of Web3.0 tokens such as Livepeer (LPT) and Bittorent (BTT) have soared this year.

As the price of Bitcoin has fallen into a months-long “waiting to take off” mode, some crypto asset traders are betting on the next potential hot market-crypto assets related to the vision of a decentralized Internet, that is, Web3.0 Token.

The data shows that between July 26 and August 1, Web3.0 tokens in the crypto assets sub-sector rose by 26%, surpassing Bitcoin (up 10.9%) and all other tokens, including NFT (up 4%) ).

From the year-to-date data, the increase of Web3.0 tokens is 244%, which lags behind NFT (the increase is 2726%), but surpasses Bitcoin (the increase is 37%) .

Will Web3.0 tokens become the next hot spot? Market data tells you the answer

Weekly price changes and performance of various assets in the past year

Source: ARca, Messari, TradingView

Messari data shows that although the entire crypto asset market has declined since April, some well-known Web3.0 tokens, such as Livepeer (LPT) and Bittorrent (BTT), have risen by at least 800% this year.

Nick Mancini, a research analyst at Trade the Chain, told CoinDesk: “The Web3.0 ecosystem has grown exponentially since the beginning of this year, and has maintained most of its gains after the general decline in the crypto market in May. This is a positive signal for the entire crypto market.” He added, “Price increases are directly related to the increase in demand at all levels and the expansion of services. Because of this, the Web3.0 ecosystem can continue to grow.”

Web3.0 is a paradigm shift of the Internet, run by network participants from all over the world, and defined by a set of open, trust-minimized and decentralized networks and protocols that provide computing, storage, bandwidth, finance, etc. service.

For example, Ethereum-based Livepeer (a streaming media platform that can protect the copyright of works) provides a market for video infrastructure providers and streaming media applications; while Filecoin (distributed storage network) and The Graph (decentralized indexing and querying) Software) Provide a decentralized file storage and data management network.

Messari’s data shows that, excluding Chainlink (decentralized oracle project), the total market value of Web3.0 tokens, including more than 40 tokens, is $25 billion.

However, if only well-known projects such as The Graph, Filecoin, and Livepeer are counted, the market value of Web3.0 tokens is less than 15 billion U.S. dollars, accounting for only 2% of Bitcoin’s market value (735 billion U.S. dollars). But this market value is similar to the scale of DeFi last year. Messari’s data shows that DeFi currently includes 137 assets worth more than $50 billion.

Waiting for the attention of mainstream people

Although the performance of Web3.0 tokens this year is much better than Bitcoin and other mainstream tokens, the industry has not yet exploded, nor has it gained much attention from mainstream people. Mature projects like Bitcoin, Ethereum, DeFi, NFT, and even Ethereum Layer2 have all received large-scale attention.

This may be because the underlying technology of Web3.0 tokens is relatively complex.

Kyle Samani, co-founder and managing partner of the crypto fund Multicoin Capital, said: “Web3.0 is not as easy to understand as DeFi. In terms of the acceptance of mainstream people, it may lag behind DeFi by 12 Month.” “We expect that consumer-oriented Web3.0 applications such as Audius (a blockchain-based multi-centralized music sharing platform) and Mirror (a decentralized content crowdfunding platform) will continue in the next 12 months. With growth, the backward situation of Web3.0 will also change.”

The DeFi boom began a year ago and has maintained steady growth so far. As of August 5, the market value of DeFi has grown from approximately US$5 billion in early 2020 to over US$50 billion.

Samani believes that Web3.0 tokens will catch up, because DeFi sometimes faces some reputation problems. For example, it may be illegal to buy and sell DeFi derivatives in the United States, and Web3.0 does not need to deal with these problems at present.

Samani said: “No one will really say that The Graph is bad, but many people in the existing financial system will say DeFi is bad.” He added, “Therefore, as people’s understanding of Web3.0 continues to deepen, We will definitely support various tokens and projects of Web3.0 more and invest more enthusiasm.”

Major institutions have entered this field one after another

Although it will take at least a year for Web3.0 to gain mainstream acceptance, investors with strong financial resources have already begun to invest a lot of money in Web3.0 tokens. The official website shows that the crypto fund Multicoin Capital has invested in The Graph, Helium and Livepeer.

Grayscale, the world’s largest crypto asset management company, launched Livepeer Trust in March of this year. Grayhaneh Sharif Askary, director of investor relations for Grayscale, said in an interview with CoinDesk last month that investment People are diversifying their investments in Web 3.0 tokens.

Askary said: “This is the diversification of asset classes. Do investors want to use Bitcoin as a store of value? Ethereum serves smart contracts.”

Askary said: “Other applications are built on these networks to solve other problems in the real world.” She added that from a structural point of view, the Grayscale Livepeer Trust and the landmark Grayscale Bitcoin Trust (GBTC) is basically the same.

The token LPT of Web3.0 streaming media platform Livepeer has risen by 1,050% this year. According to data provided by Web3Index, from February to June, the weekly revenue of the agreement increased by 10 times to more than $10,000. Doug Petkanics, CEO and co-founder of Livepeer, said that online streaming is a $70 billion market, accounting for 80% of today’s Internet traffic. In addition, analysts predict that the market will grow from US$70 billion to US$250 billion in the next five years. In the second quarter review, Messari stated that The Graph and Ocean Protocol (Web3.0 data economy tools) also have a bright future.

In addition to powerful applications, many Web3.0 tokens have obtained extremely high yields through the equity pledge service provider Staked platform. Staked is a platform that allows investors to get income from staking and DeFi without the need to custody their crypto assets.

For example, The Graph’s GRT token provides a 15% rate of return, and LPT provides a 30% rate of return. The high rate of return makes people feel positive about these tokens, as shown in the sentiment chart below.

Will Web3.0 tokens become the next hot spot? Market data tells you the answer

The Graph Mood Graph

Source: Trade The Chain

Research analyst Mancini said, “Traders are bullish on these tokens, so it contributes to the network effect. They hold these tokens and can make a profit, and in turn, they will tell others that this is a huge opportunity.”

Crypto assets are far more than just Bitcoin

Investors once equated the crypto market with Bitcoin. Although Bitcoin is still the crypto asset with the highest market capitalization, compared to other tokens, Bitcoin has performed poorly recently, which shows that investors are going deep into the crypto asset market and looking for investment targets with greater growth potential.

Jeff Dorman, chief investment officer of the crypto asset management company Arca, said in a telephone interview: “One week’s data may not make much sense, but if we look at three months, six months, twelve In May, we will find that people’s interest in Bitcoin has clearly shifted to other sub-sectors of encrypted assets, and Web 3.0 is one of them.”

A research report released by Arca on August 2 indicated that Bitcoin’s “rising capture and falling capture are both bad” this year. Simply put, in the market downturn after mid-April, Bitcoin did not perform as well as other mainstream tokens. As the market gradually recovered in July, Bitcoin remained flat.

Dorman said that once investors used Bitcoin and Ethereum as channels, but current data shows that some new investors are bypassing these two tokens and directly entering other sub-sectors.

Will Web3.0 tokens become the next hot spot? Market data tells you the answer

In recent cycles, Bitcoin’s performance relative to other tokens

Source: Arca

The above is the return of Bitcoin relative to Ethereum and other top tokens in different periods. Arca has collected data in four periods: 1) Bitcoin’s decline since its peak in 2021 (April 13, 2021); 2) Year-to-date returns this year; 3) Since DeFi bottomed last year (2020 The gains since April 11); 4) The gains since Bitcoin’s most recent bottom (July 20, 2020). You can clearly see that Bitcoin’s decline is consistent with most other crypto assets (sometimes even worse), while its rise is not satisfactory.

This is not to say that Bitcoin is a bad asset. Bitcoin may one day become an asset with a market value of 10 trillion US dollars, which will be a huge gain for Bitcoin investors (about 500,000 US dollars per coin), and due to the inevitable growth of other industries and new crypto assets With the emergence of Bitcoin, Bitcoin will become a much smaller participant in the entire encrypted asset industry at the same time. It is easy for people to fall in love with Bitcoin for some macro reasons, and at the same time realize that its fate and price no longer have anything to do with the fate/price of ETH, NFTs, DeFi, games and other crypto assets. This market has grown and developed. Owning Bitcoin and other crypto assets are not mutually exclusive. Bitcoin is a great asset, as are many other assets.


Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/will-web3-0-tokens-become-the-next-hot-spot-market-data-tells-you-the-answer/
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