Bitcoin price down; experts say cryptocurrency assets can shed up to 20%
For a few days now, the largest cryptocurrency by volume Bitcoin’s price has been on a downward trajectory, and was standing at below $36,000 on Saturday.
BENGALURU: For a few days now, the largest cryptocurrency by volume Bitcoin’s price has been on a downward trajectory, and was standing at below $36,000 on Saturday.
Though it started recovering, experts say the crypto markets will stay volatile for some more weeks.
Ever since the conflict in Ukraine, the cryptocurrency market has remained volatile, and in the last seven days, it has shed nearly 7%. The Ethereum price too continues to spiral, as in the last one week, it sank over 5%.
According to Vikram Subburaj, CEO, Giottus crypto exchange, crypto markets will stay volatile until investors, who are currently risk-off, turn to risk-on mode.
In the coming months, the surge in dollar index DXY has to reverse before there are indications of a revival in stocks and crypto.
He says that Bitcoin and other crypto assets can potentially shed up to 20% or more from current levels before investor funds start flowing into the asset again.
Also, Bitcoin has been moving on a bearish consolidation due to several macroeconomic factors since April. The US Federal Reserve has pledged to reduce its $9 trillion debt burden, for which investors and institutions have paused on one side.
“As the Bitcoin futures contract has traded lower than the spot price for most of the month, this also shows that the market participants are a little hesitant to open long positions on BTC,” says Edul Patel, Co-Founder and CEO, Mudrex, a crypto investing platform.
The global crypto market cap on Saturday was $1.66 trillion, a 0.65% increase over the previous day.
What should investors do? Subburaj says they will be better off to stack cash and wait for signals of a reversal before allocating fresh capital to crypto. He anticipates a strong Q4 2022 for crypto assets.
While volatility continues, on the other hand, there has been a rise in digital asset adoption. A recent Coinbase report indicates that 33% of British people own crypto.
The report also adds that Bitcoin is the king of crypto in the UK. Last month, the UK government spoke about its plans to create and issue its own non-fungible tokens (NFTs).
“Currently, a third of people in the UK hold crypto assets as regulatory and institutional bodies announced their decision to launch an NFT and regulate the sector. In California, the tech hub home to some of the largest innovators has also embraced digital assets with plans to regulate it - offering more clarity in the nascent space,” says CoinDCX.
Edul Patel says this move is undoubtedly a progressive one. It seems that the UK government is catching up with the developments in the crypto ecosystem.
The idea to catch the attention of a wider mass through the massively popular NFT space could be ingenious.
It will help bring awareness as the masses would now be looking at this space through a different lens.
The government getting involved and taking such steps could be revolutionary for the ecosystem globally, he adds. However, [x]cube LABS has a different view. Investments in crypto have been on the rise for several years and NFTs are all the rage, so the launch of new NFTs is hardly surprising.
“However, NFTs are not as novel as they used to be, and investors are also more cautious as more regulations emerge. While the investment is all set to continue at a steady pace and the crypto market will see growth, the launch of this NFT alone will not be a significant factor in it,” says Nilesh Jahargidar, VP Marketing, [x]cube LABS.