EY’s Paul Brody lays out bullish signals for crypto despite market carnage

Considering that significant value has been lost in the cryptocurrency market over the course of the past few months, with over a trillion in fact being wiped out, onlookers are searching for a catalyst for the next move higher.

Speaking with CNBC International TV Paul Brody global blockchain leader at Ernst & Young (EY) shared his views on the “crypto winter” and the need for regulation in the space, as well as what the bullish signals are for the market for it to move back higher.

According to Brody, it’s possible that the market is nearing a bottom, but reminded everyone that demand for crypto assets, digital assets and blockchain assets is ultimately driven by a use case:

“The past big drawdowns in the crypto space have been somewhere in the range of 75% to 90%, so we’re probably somewhere near a typical bottom. The thing to remember is that demand for crypto assets for digital assets for blockchain assets is ultimately driven by use case.”

He added that crypto adoption among businesses is the catalyst for upside:

“I think in the short run you can pump up demand with internet memes and good press but in the long run, it’s driven by what it is that we can actually do with this technology. For me, the bullish signals are improving business use cases, increasing business deployment, fixing some of this sort of structural issues in the industry like better regulation and there are a bunch of positive signals.”

Use cases and business deployment

In terms of structural improvements for the industry, Brody, the new regulatory framework in Japan, is a really robust one, and it sends a signal that an increasing number of countries are going to explicitly regulate stable currencies, which are of enormous and systemic significance for decentralized finance.

Second, the acceleration of environmental, social and corporate governance (ESG) tracking technology, which means that an increasing number of use cases will be ESG, such as carbon tracking and supply chain management; these are the types of things that will drive demand for cryptocurrency assets and blockchain technology for at least the next decade. 

These examples are all moving forward, and in that regard, it “still feels very reminiscent of 2001 right where asset prices may have crashed, but the value proposition and adoption kept on going.”