The cryptocurrency market remains in rocky waters as bitcoin lost its prior day’s gains and slid down 1.88% in the last 24-hours. After reassurance to the market by the Federal Reserve, negative news, this time about the potential ban of cryptocurrencies in Pakistan, has eaten away BTC’s gains. And there are also speculations that crypto miners are accumulating cryptocurrencies, refusing to sell them out at current prices.
Bitcoin has gained around 2.46% in the last seven days and presently stands near to the $43,000 mark. The popular cryptocurrency looks bullish in the long term. Analysts say for a big bullish move, BTC and its price action need to settle and accumulate. They believe bitcoin will likely outperform the raw materials – oil, staples and copper over the coming decade.
Currently, bitcoin is being pushed around by US’s 39-year high inflation. Experts say policy shifts to tackle inflation and a changing outlook for non-equity assets will leave an impact on stocks. But there is also optimism from big investors. They believe value stocks will finally have a bright year in 2022. The big investors foresee a return to normalcy and this will boost the advantages of holding value stocks.
Matt Maley, Miller Tabak+Co’s chief market strategist, highlighted that cryptocurrencies benefited from the Fed’s massive liquidity injections since 2020. He believes the assets may have been pushed too far and too fast. Bitcoin and other cryptocurrencies took a dive just minutes after Fed minutes revealed that officials are contemplating removing the stimulus earlier than expected.
A fast increase in interest rates will potentially keep investors away from cryptocurrencies. But some analysts are of the view that there may be positive implications in store for bitcoin. They see BTC as a risk asset that is evolving into a digital-reserve asset. And the world is headed that way too. Thus, it will show positively on bitcoin’s price.
