Will the crypto market go into a correction?
Analysts believe that the cryptocurrency market is waiting for a correction. Earlier, the US Fed raised the key rate from 0.0–0.25% to 0.25–0.5% per annum. The rate, according to the head of the analytical department of AMarkets Artem Deev, will continue to rise. This will lead to a reduction in money in the market, the expert believes.
“A tightening of monetary policy in the US and other countries will certainly lead to the fact that a recession will begin in the global economy. The stock markets will again move to a correction, cryptocurrencies will also decline,” the expert is sure.
Deev stressed that at present, many states have begun to talk about the legalization of digital currencies. This can make the industry transparent to regulators. At the same time, according to the analyst, it was anonymity, together with the infusion of investments in the economies of developed countries, that contributed to the growth of the crypto market in 2020 and 2021.
“Now both of these factors will be curtailed, and the crypto market will go into correction in the near future,” the expert suggested.
BitRiver financial analyst Vladislav Antonov does not consider the main crypto coin to be a defensive asset. In his opinion, it will be possible to speak about the end of the correction in the market only when the price of bitcoin overcomes the mark of $46,000.
But the analyst is sure that the crypto market is already ready for a new rally, as there are “all technical conditions” to restore the BTC rate to $51,800.
Roman Nekrasov, co-founder of the ENCRY Foundation, agrees with the opinion that the main crypto coin cannot be considered a protective asset. He pointed to the high volatility of bitcoin, noting that the crypto-coin is better used together with assets that are subject to less fluctuations.
“It’s not worth investing all your savings in bitcoin, but ignoring a new financial instrument is also not the best strategy. The most effective is the inclusion of bitcoin in the investment portfolio and competent diversification,” says Nekrasov.
But BitMEX co-founder Arthur Hayes predicts that the main cryptocurrency against the background of today’s sanctions will have an advantage over gold and the US dollar. According to the crypto enthusiast, in a difficult economic situation, people trust assets with a limited supply or supply, considering them to be a more reliable tool for storing savings.
“Whether you have 1 satoshi or 1,000 bitcoins, all you need is a public and private key. Bitcoin has no weight and can be accessed anywhere where there is internet. Compared to gold, bitcoin has more advantages in terms of storage and transactions. Remember: not gold or bitcoin is growing in price, but the value of the fiat currency in which they are valued is declining,” said Hayes.
Which expert do you agree with? And why?