The cryptocurrency sector is currently facing many troubles and the trend has been ongoing since mid-2021. Despite the efforts made by several major cryptocurrency investors and enthusiasts, the situation for cryptocurrencies is not improving.

Fear among Cryptocurrency Investors

The cryptocurrency industry can now be segregated into two segments. The first segment is purely cryptocurrencies where people interact with the cryptocurrencies directly.

Then comes the second segment where people interact with the digital asses indirectly. In most cases, these are exchange-traded funds (ETFs).

It’s been more than 12 months since the overall performance of cryptocurrencies is below average. A year back, the overall valuation for cryptocurrencies was more than $2.7 trillion. Now, the figure has shrunk to almost $1.28 trillion. This is a huge loss for the entire cryptocurrency sector and it seems that it is not making any recovery.

When a sector continues demonstrating a downtrend for such a long time, it eventually leads to many uncertainties. It raises many concerns among the investors, wanting to know if the problem would persist for a while.

For example, an investor who bought a Bitcoin (BTC) back in April of 2021 at $64k would still be waiting for BTC to show a recovery. At the time of writing, Bitcoin’s price is hovering around $30k, which is the sheer test of patience for millions of investors who bought Bitcoin at a higher price.

As the trend for cryptocurrencies is constantly negative, it is causing huge fear among investors. It is people who have managed to push the cryptocurrency industry so far. They are hoping to see the cryptocurrencies rise again but it is feared that they may lose their patience.

If that happens, then a mass selling trend may get triggered again, causing another major plunge. This may end the cryptocurrency sector for good, and slowly, people are starting to grow this fear.

Institutional Demand May Keep the Cryptocurrencies Going

The best thing that happened to cryptocurrencies back in 2021 was their mainstream adoption. Since then, many companies and exchanges from around the world have launched integrated cryptocurrency exchange-traded funds (ETFs). This is the second segment of cryptocurrencies where the investors do not make direct contact with cryptocurrencies. Instead, they deal with cryptocurrencies in the form of shares, stocks, or stake.

While the cryptocurrency industry is in despair, the ETF sector is thriving. One of the major ETFs known as WisdomTree is an example of constant indirect growing demand for cryptocurrencies.

So far, many institutional companies from Europe, Australia, North America, South America, and other parts of the world have launched their own ETFs.

It is the ETFs that have kept the cryptocurrency sector fueled and has kept them in demand. They are a beacon of hope for direct cryptocurrency investors assuring them that the cryptocurrencies are not going anywhere.

Therefore, the investors can keep holding onto their crypto possessions or switch to the ones that have a higher chance of survival in the long run. This may allow them to benefit tremendously when the cryptocurrencies start moving toward the recovery phase.