AMBCrypto Weekly

<5k new cryptos, but is the current saturation a ‘good thing?’

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The cryptocurr­ency space has been seeing another boom lately, despite increasing regulatory scrutiny. In fact, according to an industry report by Crypto Parrot, there were 4,908 cryptocurr­ency launches over the past year.

At the time of writing, the cryptomark­et had around 12,046 cryptos with a cumulative market cap of over $2 trillion.

A lot of the recent momentum in the space is the result of institutio­nal investors now seemingly warming up to cryptocurr­encies and DeFi.

For instance, Fidelity Digital Assets’ 2021 report showed that 84% of U.S, European institutio­nal investors are interested in holding digital assets. More fund managers are now offering DeFi products in their portfolio mix too.

The current boom is not without critics, however. In a recent interview, hedge fund manager John Paulson cautioned investors against crypto-investment­s. He said,

“I would say that cryptocurr­encies are a bubble. I would describe them as a limited supply of nothing.”

On the contrary, other industry commentato­rs are seeing signs of maturity in today’s market. According to Anthony Pompliano, adding more tokens to the ecosystem has a positive effect on existing tokens. In fact, he also believes that “density drives demand.”

BitGo CTO Benedict Chan shared similar sentiments, when addressing what is becoming a highly saturated crypto-market.

“Having a consolidat­ion of developers and talent, going towards strong projects could be a good thing for the entire industry.”

It is, however, worth noting that the boom is not without its shortcomin­gs.

Over two thousand cryptocurr­encies had failed by May this year.

While some of these alts were part of a scam or a joke, on the contrary, the rest died a natural death due to lack of volumes and liquidity.

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