Investing.com – The scenario of inflation, war and escalating interest rates has not been promising for the major cryptocurrencies traded this year, Bitcoin and. However, in Hashdex’s view, these factors created the perfect test case for today’s most important investment thesis, the emerging digital store of value. For Hashdex, while the year was one that saw the fundamentals of Bitcoin strengthen, the year should benefit from the development of new second-tier solutions. The information is taken from the Crypto Investment Outlook, a report released to clients and the market.
Bitcoin, the cryptocurrency with the highest market cap currently traded, followed a decline during this year’s crypto winter in “clear evidence that it is not currently acting as a hedge against inflation,” according to Hashdex analyst Lucas Santana.
“Instead, similar to other risky assets, Bitcoin benefits from the monetary expansion of fiat currencies and suffers from the difficulties it faces in a hawkish environment,” he adds.
However, the analyst believes the year has strengthened the fundamentals of the asset, with a significant milestone in the adoption of the Lightning Network, as well as the launch of Lightning payments via CashApp, which has allowed nearly 40 million users to start using cryptocurrency as a medium of exchange.
“The past year also brought new all-time highs for Bitcoin hash rate and mining difficulty, as the network is now more secure than ever, despite lower revenues for miners,” Santana points out.
Additionally, there is an increase in institutional adoption. Fidelity began allowing retirement plans to invest in bitcoin in April; BlackRock (BVMF:) (NYSE:) launched its first private bitcoin fund for institutional clients in August; and Google (BVMF:) (NASDAQ:) have partnered with Coinbase (BVMF:) (NASDAQ:) to enable crypto payments on cloud services. “
Hashdex says it is confident that greater regulatory clarity for Bitcoin over other crypto assets should increase adoption by institutional investors.
By 1:24 pm, bitcoin was down 1% at $16,607.
Ethereum has also suffered from a drop in cryptocurrency prices. However, the Hashdex analyst believes that this year has been among the most important in the history of the asset.
“After seven years in development, the transition to proof-of-stake has gone smoothly in one of the most anticipated events in the crypto ecosystem, The Merge. This transition is a major breakthrough, he notes, as the key turns into a new security mechanism that dramatically reduces power usage from the network. .
According to Santana, the first signs of change were seen shortly after the merger and the future of Ethereum for the next year is promising.
In addition, the Shanghai hard fork is one of the most anticipated Ethereum upgrades in 2023. “Precisely because it enables stakeholders to migrate their ether holdings between validators or earn profits from staking rewards,” which could make the network more decentralized, he assesses.
The market has yet to see how demand for ETH can be driven by the development of new second-tier solutions, and 2023 is expected to be the year to launch initial hash functions, “increasing the total capacity of its base layer and further democratizing access to verification.” network,” he adds.
ETH fell 1.43% to $1,103 by 1:24 pm.