Crypto Winter

Goldman Sachs Warns Bitcoin Increasingly Vulnerable to Fed Rate Hikes as Mainstream Adoption Grows

31/01/2022 by Idelto Editor

Global investment bank Goldman Sachs has warned that bitcoin is increasingly vulnerable to the Federal Reserve’s rate hikes as the cryptocurrency grows more widely adopted. “Over the last two years, as bitcoin has seen wider mainstream adoption, its correlation with macro assets has picked up,” the Goldman analysts explained.

Goldman Sachs Warns Bitcoin Increasingly Vulnerable to Fed Rate Hikes

Global investment bank Goldman Sachs published a research note Thursday detailing bitcoin’s increased vulnerability to the Federal Reserve hiking interest rates.

Zach Pandl, bank’s co-head of foreign exchange strategy, and FX analyst Isabella Rosenberg explained that as mainstream adoption of bitcoin increases, so does the cryptocurrency’s vulnerability to Fed policy. They described:

Over the last two years, as bitcoin has seen wider mainstream adoption, its correlation with macro assets has picked up.

Noting that higher bond yields have affected technology stocks in recent weeks, with the Nasdaq 100 index falling more than 13% for the year, the analysts noted: “Bitcoin and other digital assets have likely suffered from the same forces … These assets will not be immune to macroeconomic forces, including central bank monetary tightening.”

The markets now expect the Fed to hike interest rates five times this year. Goldman Sachs believes that the Fed could raise interest rates at every meeting this year. The post-meeting statement from the Federal Open Market Committee (FOMC) last week did not provide a specific time for when the increase will come, though indications are that it could happen as soon as the March meeting.

Goldman’s analysts further commented:

Over time, further development of blockchain technology, including applications in the metaverse, may provide a secular tailwind to valuations for certain digital assets.

Recently, Goldman Sachs said that the metaverse could be an $8 trillion opportunity. Rival investment bank Morgan Stanley similarly estimated a comparable size for the metaverse.

Earlier this month, Goldman Sachs predicted that bitcoin could reach $100,000 as the cryptocurrency continues to take gold’s market share. Meanwhile, Switzerland’s largest bank, UBS, has warned of a crypto winter amid expectations of Fed rate hikes and regulation. At the time of writing, bitcoin is trading at $37,502 based on data from Bitcoin.com Markets. The crypto is up 6.6% in the last seven days but down 20.5% in the past 30 days. However, it is still up 9.8% for the year.

A recent report by Crypto.com shows that the number of global crypto owners is expected to surpass 1 billion this year.

Do you agree with Goldman Sachs? Let us know in the comments section below.

UBS Warns of Crypto Winter Amid Expectation of Fed Rate Hikes and Regulation

24/01/2022 by Idelto Editor

UBS, Switzerland’s largest bank, has warned about a crypto winter where prices crash and may not recover for years. The bank’s analysts explained several major reasons affecting the prices of cryptocurrencies.

UBS Expects Crypto Winter That Could Last Years

Switzerland’s largest bank, UBS, has warned of a crypto winter where prices crash and may not recover for years. The bank’s analysts, led by James Malcolm, recently explained in a note to clients several reasons why cryptocurrency may lose its attractiveness to investors this year.

Firstly, the UBS analysts detailed that the Federal Reserve’s interest rate hikes are set to reduce the appeal of cryptocurrencies, such as bitcoin, for many investors who see the asset class as a good alternative store of value.

The analysts added that if central banks move to get a handle on inflation, investors may not be holding bitcoin as protection against rising prices. They noted that government stimulus was a key factor boosting the prices of cryptocurrencies in 2020 and 2021.

The Fed is expected to raise interest rates several times this year. JPMorgan CEO Jamie Dimon recently said that the Federal Reserve might have to raise short-term interest rates more than four times this year. Goldman Sachs similarly expects the Fed to raise interest rates four times this year. Wharton’s finance professor Jeremy Siegel said earlier this month, “The Fed is going to have to hike many more times than what the market expects.”

The UBS analysts also claimed that some investors are increasingly realizing that bitcoin is not “better money” because of its high volatility. In addition, they said the cryptocurrency’s limited supply makes it inflexible as a currency. The analysts further stated that blockchain technology is hard to scale because of its decentralized design.

Another major hurdle for cryptocurrency is regulation, the UBS team described. Widespread cryptocurrency speculation “inevitably invites closer oversight to guard consumers” and “protect financial stability,” the analysts warned. They elaborated, “high-flying stablecoins and defi [decentralized finance] projects seem almost sure to face bigger setbacks from authorities in the coming months.”

In the U.S., the Biden administration is reportedly drafting a government-wide strategy for crypto assets. Furthermore, the chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, said last week that regulating crypto exchanges is a top priority for the SEC.

What do you think about the warning by UBS? Let us know in the comments section below.

Bitcoin Price Slips Below $36K, BTC Dominance Increases, Billions Leave Crypto Economy

22/01/2022 by Idelto Editor

The price of bitcoin tapped a new low this year hitting $34K per unit at just after 5 a.m. (EST) on Saturday morning. Bitcoin is now down over 48% lower than its all-time high (ATH) reached two months ago on November 10, 2021 — when it jumped above the $69K mark. During the last week alone, bitcoin has lost 17% in value and a great number of traders and investors are curious as to when the carnage is going to end.

Digital Currency Market Carnage Continues, Crypto Economy Drops to $1.75 Trillion

It’s been a blood bath in the world of cryptocurrencies this week, as bitcoin’s (BTC) price has dragged every coin down with it. Today, the entire crypto-economy has lost 11% in the last 24 hours. BTC has been on a downtrend since the crypto asset’s ATH, and since December 27, 2021, back when BTC was trading for $52K, bitcoin has lost more than 32% in value against the U.S. dollar.

Just after 5 a.m. (EST) on Saturday morning, BTC’s value dropped to its lowest point of the year so far, tapping $34,000 per unit. The leading crypto asset’s 24-hour range has been between $39,177 and 34,000 per BTC. While BTC has dropped in value a great deal during the last 48 hours from $43,400 to the current $35.5K to $36K per unit, BTC dominance has increased significantly.

At the time of writing, BTC’s market dominance is 39.5% which is 5.33% higher than it was on January 6, 2022. Ethereum dominance, on the other hand, has dropped to 17% and a myriad of other crypto assets shed lots of dominance percentages as well. Out of the top ten crypto assets, polkadot (DOT) shed the most during the week, losing 32.1%.

Furthermore, solana (SOL) is down 30.5% in seven days, and ethereum (ETH) has dropped by 24.6% since last week. BNB is down 23.9% and xrp (XRP) and terra (LUNA) are both down 21.2% over the last seven days. BTC and ADA saw the least amount of percentage losses this week as ADA shed 12.4% and BTC dropped 16.8%.

The crypto economy has shed quite a bit of value this past week, and it has a lot of people talking about the crash on social media. Vertical trends on Twitter indicate hashtags like #cryptocrash and #bitcoincrash are trending alongside discussions about Michael Saylor and Microstrategy’s bitcoin stash. People have been wondering whether or not Saylor and Microstrategy will sell their BTC holdings and people have questioned Tesla holding its bitcoin long term as well.

Meanwhile, most of the crypto supporters on Reddit forums and social media channels like Twitter, have no idea when the carnage is going to end. While a number of crypto advocates believe the bearish markets are almost over and new ATHs are on the horizon, others believe BTC could drop even further, below the $20K zone.

Youtuber Colin Talks Crypto tweeted that he believes the bull run is not over. “Bitcoin’s price has crashed enormously,” the crypto Youtuber wrote. “Many are fearful and panicking. This is understandable. Zoom out. We’re still up from the July 2021 drop to $29K. For me, the bull run isn’t over unless the bitcoin price is below $29,000 (and not just a momentary dip below it).”

What do you think about the recent bitcoin price plunge and how it dragged down the entire crypto-economy? Do you expect more bearish crypto prices or do you think the bull run is not entirely over? Let us know what you think about this subject in the comments section below.

2019 Google and Yahoo Searches for Bitcoin Decline Significantly

24/12/2019 by Idelto Editor

2019 was an interesting year for cryptocurrencies. Some would say it wasn’t as bad as the crypto winter in 2018 and others would note it wasn’t as great as bull run 2017. One thing’s for sure, ever since the all-time price highs, interest in cryptocurrencies has been waning. According to data from Google Trends and Yahoo Finance, searches for the terms “bitcoin” and “cryptocurrency” are much less than they were in the summer.

Also Read: Only 375 Days Left for McAfee’s $1M Bitcoin Price Wager

Queries for ‘Bitcoin’ and ‘Cryptocurrency’ Dive in 2019

During the bull market of 2017, interest in terms like “bitcoin” and “cryptocurrency” peaked as far as searches are concerned on the Google Trends scale. After December 17, the scale touched 100 for searches for the word “bitcoin” and hasn’t reached that number since. In fact, searches for the term are currently in line with the number of searches in the spring months of 2017.

The week of May 7, 2017, Google Trends touched a 10 and today the scale is hovering at approximately nine. Search trends for “bitcoin” also saw a nine on the scale in November 2013 just after the start of that year’s bull market. During the week of May 2019, searches for the word hit a low of seven but started rising back up again during the months. Data shows that in mid-June people looking up the word “bitcoin” jumped to a high of 26.

The term “bitcoin” has a higher concentration of queries in countries like Nigeria, South Africa, Ghana, Austria, St. Helena, Netherlands, Slovenia, Singapore, Switzerland, and Australia. Queries closely related this year include “ethereum price,” “Binance,” “IOTA,” and “bitcoin price.” Searches for “bitcoin + news” have a different perspective as interest by region for this subject using Google Trends data over the last five years shows the top countries are Slovenia, Switzerland, Austria, Netherlands, and Cyprus. Queries for the term “bitcoin cash” are the top related topic and the number one related query according to Google’s five-year data, which is followed by “ethereum” and “IOTA.”

Yahoo Reports Searches for ‘Bitcoin’ 65% Fewer Than Last Year

On December 20, finance columnist for Yahoo, Edmund Heaphy, explained that “cryptocurrency searches crash 84% on Yahoo Search in 2019.” Heaphy disclosed that “new Yahoo Search data revealed,” that there were 65% less queries for the term “bitcoin” than last year. The report also noted that the research and data provider The Tie also recorded that institutional investors are losing interest in this technology.

News.Bitcoin.com reported on the Tie’s findings in October when the firm studied 85,000 headlines. “Mentions of institutional interest in bitcoin in news headlines have plummeted to a 2019 low after seeing significant growth throughout the summer,” The Tie researchers detailed. “The data used more than 85,000 unique publication headlines since October 2017.”

Can Halving Anticipation Keep Things Interesting?

Ironically, the drop in institutional interest took place when 2019 was considered a year geared toward derivatives markets like Bakkt and many firms creating custodial services for institutions. As far as cryptocurrency markets are concerned, it’s been a wild ride in 2019 as bitcoin and other digital currencies have been quite volatile.

Despite the lack of searches for the word “bitcoin” and “cryptocurrency,” queries for the term “bitcoin halving” have jumped since August. The current block subsidy for digital currencies BTC and BCH will be chopped in half by spring 2020. This event might be the key element to keeping some public interest as the halving will affect the billion-dollar mining industry a great deal.

What do you think about the waning interest as far as searches for the words “bitcoin” and “cryptocurrency”? Let us know what you think about this subject in the comments section below.

Image credits: Shutterstock, Fair Use, Google Trends, Yahoo Finance.

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Blockchain Projects Bloom as Crypto Spring Fuels a Fundraising Boom

28/04/2019 by Idelto Editor

As crypto winter subsides, spring has sprung in the cryptosphere, ushering in green shoots of growth across the board. Attention has largely focused on the increase in digital asset prices, as cryptocurrencies have swelled by an average of 40% in 2019. But away from the frothy market action, there is far more tangible evidence that the worst of the downturn is over. Scores of crypto projects have reported renewed interest from investors, signaling that better times are ahead.

Also read: How to Create a Bitcoin Cash Wallet With Cashaddress

Crypto Spring Is in Full Bloom

There is still significant debate as to whether we’ve officially exited the bear market that has dragged on since early 2018. Some commenters, such as Vinny Lingham, believe BTC will have to surpass $6K territory again for that to occur. Regardless of whether bitcoin’s cup is currently deemed to be half full or half empty, what’s indisputable is that raising funds has become significantly easier for crypto projects since the market perked up a months ago. This week, news.Bitcoin.com spoke to more than half a dozen projects that all reported a similar story: investors have loosened their purse strings.

While the most obvious manifestation of this has been in initial exchange offerings, away from the IEO market, a broad array of crypto projects have good tidings to report. Kinesis is a yield-bearing digital asset which is backed by physical gold and silver. Its CEO Thomas Coughlin told news.Bitcoin.com: “It’s great to see renewed interest in the crypto markets and with our own Kinesis stablecoin sale, we’ve seen a surge in interest and investment from the crypto community. The heating up of the markets has attracted newcomers and renewed confidence from those who were waiting for more favorable conditions to get involved.”

This sentiment was echoed by GEO Protocol, a layer three solution that aims to connect networks to create a universal value transfer system. Earlier this month, the project announced it had opened a seed round with the participation of US firm Coinfund, the timing of the deal aided by a propitious fundraising climate. “Crypto winter has washed away many of the weaker and more dubious projects,” Dima Kovalchuk, business development director at GEO Protocol, told news.Bitcoin.com. “Nowadays investors are much more picky. If a year ago they could give money to virtually anyone, now they are looking for prospective projects with deep technical expertise, like GEO Protocol. That indicates that the market has matured, and is ready for take-off, on a basis that will be much more justified by real innovation and economics.”

More Whales, More Action

All across the cryptosphere, there are signs that something has stirred, awakening former giants, from “retired” traders coaxed back into the game, to dormant whales reawakened and willing to thrown down large sums on projects with wanton abandon. Roobee, a blockchain-based investment service, has been one such beneficiary, having raised $4.5 million in pre-seed funding with the aid of a famous crypto whale who chipped in $1 million alone, encoding their 200 BTC transaction with the words “In Roobee I Trust” as an added flourish.

Finally, cryptocurrency service providers have reported an uptick in activity. Felipe Vorobey, who oversees Cash Games for Bitcoin.com, reports that “in the past three weeks the number of both new and returning players has significantly increased. This is a clear indication that crypto users are looking to own more BCH and in finding fun ways to participate in the cryptoconomy, such as gaming.”

Jumber Kruashvili of market data site Coinlore reported similar findings, telling news.Bitcoin.com that site traffic and registrations are up by 20% in the past month, and the average time spent on the site has increased, with BTC, BNB, ETH, and OMG among the most popular pages visited. It would be premature to predict that a full-blown bull market is imminent. Nevertheless, there are clear signs that crypto winter has melted away, leaving behind the first blossoms of an industry rejuvenated.

Do you think the crypto market will maintain its recovery, or are there more trying times ahead? Let us know in the comments section below.

Images courtesy of Shutterstock.

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