Crypto market: adoption and innovation drive prices

Crypto market: adoption and innovation drive prices 1024 500 Crypto Rand Group

Crypto market is often approached via a cyclical typology. Let’s see how this is described by Andreessen Horowitz’s study.

The analysts of the crypto market a16z fund have studied at length the typology of the various company managers and individuals involved in cryptosystems. Andreessen Horowitz has accumulated 10 years of data and divided the arrival of new participants into 3 distinct cycles.

These 3 cycles all have one thing in common: a peak in public interest resulting in strong price appreciation.

The different cycles of the crypto market

2009-2012

The peak of the first cycle occurred in 2011. Prior to that, Bitcoin was simply considered to be an experiment. But after having gone from $1 to $31 between February and June 2011, several entrepreneurs realized that it was possible to create viable projects around crypto currencies. This period saw the birth of the biggest trading platforms, leaders in mining and electronic wallets.

Crypto market cycle1

First cycle: orange = Bitcoin price; blue: developers’ activity; green: startups’ activity; purple: social networks’ interest


2012-2016

The second cycle is surely the one that has attracted the most people outside the technological sphere. In 4 years, 10 times as many developers and startups have joined the ecosystem. Important projects have emerged, with Ethereum at the top of the list.

Crypto market cycle 2

Second cycle: orange = price of Bitcoin; blue: developer activity; green: startup activity; purple: interest of social networks


2016-2019

The third cycle, peaking in 2017, has propelled the ecosystem into the public sphere. Media attention has played a large role in this resurgence of newcomers. Once again, the number of developers and startups participating in the ecosystem increased tenfold.

Crypto market cycle 3

Third cycle: orange = price of Bitcoin; blue: developer activity; green: startup activity; purple: social networks interest


Growth of the crypto : the average annual balance sheet

Since 2010, there have been three distinct phases. And since 2019 we have entered the fourth cycle, which will see the results of the projects initiated during the previous period.

Here is a summary of the average annual growth rates:

Crypto market cycle sumary

Balance of the 3 cycles cumulated in average growth rate.


From 2010 to 2019, the CAGR (Average Annual Growth Rate, TCAM) for the price of Bitcoin grew by 196.4%.  The most pronounced growth was that of interest expressed via social networks, which grew by 207.5% in the space of ten years.

The activity of developers and startups increased by 74.4% and 53.9% respectively.

The year 2018, following the historic bull run that propelled Bitcoin to around $20,000, remains the period when interest and activity peaked the most. Will the fourth cycle we have entered follow the trend? See you next year for the results.