The value of Bitcoin (BTC -3.67%) has fallen 66% since the beginning of November, and the drop may not be over. Investors are getting liquidated left and right, and buyers to backstop sellers don't seem to be flooding into the crypto market right now. 

Is the drop in Bitcoin a crypto problem or a Bitcoin-specific problem? It may be a little bit of both. 

Crypto winter begins

The crypto market peaked in November 2021 and has been falling since then. That led to the price decline in Bitcoin as well as Ethereum (ETH -3.13%), Solana (SOL -5.33%), and almost every other cryptocurrency. But price tells only part of the story. 

According to Messari, Bitcoin volume on exchanges has fallen 67% since Nov. 1. Similar declines in volume have taken place for other cryptocurrencies. But Bitcoin may be more reliant on transactions and acting as a digital currency than cryptocurrencies that are built with smart contracts from the start. 

Where Bitcoin is falling behind

While transactions are important for any cryptocurrency, blockchains like Solana and Ethereum are attractive to developers who are building real businesses on blockchain technology. According to Andreessen Horowitz's State of Crypto report, Solana has nearly 1,000 monthly active developers building on the blockchain, Ethereum has nearly 4,000, and, despite being by far the oldest cryptocurrency, Bitcoin has only about 500 developers.

The growth in development of Solana and Ethereum is astounding as well. Solana developer numbers have gone from almost none to near 1,000 in a year, and Ethereum has doubled its developer count in the last three years. 

Blockchains like Ethereum and Solana are built with smart contracts in mind, and that's why they're attractive to developers. This enables projects like non-fungible tokens and decentralized finance and much more innovation to be built on top of the blockchain. Bitcoin hasn't been able to attract the same kind of innovation. 

Is adoption slowing, or is Bitcoin losing favor? 

If you go back to the bullish thesis many investors have behind Bitcoin, it's that it's either an inflation hedge or like digital gold (which some also see as an inflation hedge). The hedge part of the thesis has fallen apart rapidly, as inflation has picked up and Bitcoin's price has dropped, correlating more with growth stocks than anything else. 

But there's also a limit to the upside for a digital asset that's supposed to act like digital gold. Bitcoin also is expensive and slow to use in transactions and takes a lot of energy to create.So Bitcoin's adoption is slowing as a result. 

What I see is development actually building on other blockchains. Ethereum and Solana are the two biggest from a development standpoint, but others are competing with combinations of speed, low costs, flexibility, and innovative contract features. 

Bitcoin's problems may be confined to Bitcoin, but digital assets overall are in a fast development cycle, even as the values of cryptocurrencies themselves are down. That's what makes me still bullish on the industry