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- The market showed bullish trends, as trading volumes and total market cap soars.
- Total market capitalization for crypto is at $1.9 trillion, at the time of writing.
- There is a notable shift from centralized exchanges to decentralized exchanges.
Statistics show that the market started to recover from the recent 76-day bearish trend. The total market capitalization is now $1.9 trillion (at the time of writing), a significant increase since May 2021’s bearish dips.
Many wonders where the action is coming from. Some attribute the market’s rise to the launch of EIP-1559 which introduced a deflationary mechanism into ETH as it disintegrated the Miner Extractable Value (MEV) problem. After the news, ETH soared up to 3000 USD.
Meanwhile, on-chain statistics show that a huge chunk of BTC transactions happened outside of exchanges. This means that users may be making their purchases through OTC platforms. According to analyst Willy Woo,
Strong HODLers have been taking this opportunity to scoop large amounts of coinage.
Just a matter of patience and time before $42k breaks.
Strong HODLers, the Rick Astleys of this world, have been taking this opportunity to scoop large amounts of coinage while we’re under the resistance ceiling. pic.twitter.com/AnUL9AdIHM
— Willy Woo (@woonomic) August 6, 2021
Aside from these, Non-Fungible Tokens are also on the rise. One crypto punk sold for $90 million while the most popular Play-to-Earn blockchain game Axie Infinity, also played a role in the rise of the trading volume — the project’s total volume in July is almost $120 million.
Simultaneously, regulatory pressure for centralized exchanges led to Binance reducing the withdrawal limit for unverified accounts from 2 bitcoins to 0.06. Binance also showed signs of being open to regulation. This may have sparked a notable shift from CEXs to DEXs.
Decentralized exchanges like Uniswap and Polkadex are now being the go-to platforms of traders who wish to steer clear of regulations. The latter features a fully decentralized P2P DeFi-based orderbook. It combines the best features in CEXs into DEXs, leading to benefits like high liquidity, faster transactions, and a P2P trustless environment.
Aside from this, Polkadex introduced an Initial Dex Offering (IDO) feature. With this, projects can build ERC-20 tokens with support for cross-chain transactions. Moreover, projects can list their tokens in the Polkadex orderbook and utilize a decentralized KYC feature.
While users are flocking to DeFi, it’s not safe from regulatory pressures. Authorities are also eyeing Proof-of-Stake (PoS) projects as targets for regulation and taxation.
According to SEC Chairman Gary Gensler,
In my view, the legislative priority should center on crypto trading, lending, and DeFi platforms. Regulators would benefit from additional plenary authority to write rules for and attach guardrails to crypto trading and lending.
Financial markets have always faced some form of regulation. While crypto regulations seem inevitable, many are not on board and stay loyal to the idea of decentralization.