In this still-emerging business, volatility has always been a constant. Cryptocurrency is infamous for its steep declines and spectacular recoveries. Long-time Bitcoin supporters can confirm that this is not the first crypto winter.
May cryptocurrency prices and stocks recover in 2023?
Hany Rashwan, CEO of 21.co, a cryptocurrency investment business, said, “It is very evident that we as an industry need to produce better solutions.” During the prior bull market, there was a great deal of nonsense. People sought enthusiasm. Rashwan said that he is quite surprised that the crypto carnage has not been greater.
Bitcoin’s price is still hovering around $17,000 despite the latest sell-off (it fell more than 15% in November alone). That is around three times where prices were at the crypto bear market’s low in the early epidemic days of 2020.
How are we still so close to $17,000? This indicates something. It indicates that individuals are still attempting to secure their possessions via cryptography. Rashwan said, “Trust has not been rattled to the core.” Others assert that the blockchain technology powering bitcoin and cryptocurrencies remains stable.
A potential silver lining here is that crypto projects now have the chance to weather downturns as a routine part of their business cycle, as opposed to being blindsided by them.
In recent weeks, investors have been reassessing their commitment to these so-called “hawkish” Federal Reserve (Fed) bets and rushing back into risk assets, excluding bitcoin, due to the peak inflation story and the central bank hinting at a deceleration in liquidity tightening from December.
Wall Street’s benchmark stock index, the S&P 500, has risen 16% in two months to trade above the 200-day moving average for the first time since early April. The USD/JPY, a “turbo gamble” on Fed policy and U.S. rates, fell 11% to its 200-day moving average. The dollar index, which gauges the dollar’s value versus major fiat currencies, is also below its 200-day average.
Bitcoin is detached from macroeconomic events and conventional markets. The top cryptocurrency by market value traded at $17,340, 22% below its 200-day moving average.
The FTX’s collapse couldn’t have occurred at a worse moment for bitcoin and the crypto industry. “U.S. equities and crypto have historically correlated.” “Bitcoin might have traded at $29,000 instead of $17,200 (69%) without the FTX collapse,” Matrixport’s Markus Thielen claimed. “Those costs might still be obtained,” Thielen remarked.
Chris Kline, CRO and co-founder of Bitcoin IRA, a digital asset technology platform for individual retirement plans, said that it is hard to determine with absolute confidence whether the fall of FTX would extend the present bad market.
Prior to the demise of FTX, cryptocurrency values were on the rise: bitcoin had just recaptured $20,000, and ethereum surpassed $1,600 for the first time in over a month. However, the bankruptcy of FTX, which quickly followed the release of a bombshell Coindesk piece on November 2, sent these values to all-time lows.
“FTX is quite distinct from the previous bankruptcies in this industry,” Kline said. “In my perspective, misconduct and fraud are considerably more probable on the FTX side… ” I believe it harmed public confidence. “
Cryptocurrency is a retail-driven asset class, so public trust is very important in this environment. “The trust element will be enormous when we bring these individuals back into the market or introduce them to the market for the first time,” Kline added.
© 2022 Cryptopress. For informational purposes only, not offered as advice of any kind.