Zschaepitz’s remarks coincide with the crypto sector’s tumultuous state over the last year, including a notable 87% reduction in venture funding for blockchain and crypto startups during Q1 of 2023.

The repercussions of the crypto scandals of the past year and the demise of several significant startups have left the industry in a state of ambiguity. Although Zschaepitz recognizes that the rise of Bitcoin may be the beginning of a new era, it alone cannot rectify the damage caused by the previous downturn.

Moreover, regulatory scrutiny and enforcement measures in the United States have complicated the market further, while the collapse of banks that were supportive of crypto has severed crucial links to the US financial system.

The crypto industry is currently facing a significant hurdle in the form of a significant decrease in venture funding. During Q1 2023, blockchain and crypto startups were able to raise only $900 million, indicating an 87% reduction from the same period in the previous year.

The current downturn has sparked concerns about the future growth of the struggling crypto sector, particularly after the significant failures of prominent entities like FTX and Celsius. Despite these challenges, there are positive developments within the industry.

Ethereum’s successful completion of a network upgrade is one such example, and the potential conclusion of the tightening monetary policy cycle could pave the way for more favorable conditions to facilitate a crypto rebound.

Zschaepitz proposes that the surge of Bitcoin to $30,000 could simply be the beginning and that a more resilient and enduring recovery will likely rely on various factors that go beyond the performance of a single cryptocurrency.