In the latest in a series of cryptocurrency declines, Bitcoin today renewed its current low to $42,112, its lowest price since March 24.
However, market feedback suggests that the enthusiasm for cryptocurrencies is in contrast to the lackluster performance:
Today's market sentiment index was 37, indicating panic, but up slightly from 34 yesterday. The market's bullish confidence is even stronger.
Market analysts say that the decline of cryptocurrency is mainly due to the expansion of the Federal Reserve's interest rate hike and asset reduction, the strengthening of the DOLLAR and the weakness of safe haven assets, and the decline of bitcoin.
The Fed may begin to shrink its balance sheet by $95 billion a month, according to the fed minutes. Meanwhile, the market is betting that the Fed will raise interest rates by a cumulative 250 basis points in 2022, the most aggressive tightening in nearly 30 years.
On the news, the DOLLAR index DXY was trading at 100.17, its highest since May 2020.
However, cryptocurrency continues to decline, showing a strong risk crisis, if the market economy to achieve a strong recovery, then the dollar will continue to strengthen, and affect the adoption of cryptocurrency.
But in fact, there are still major concerns about economic recovery in the market, and the adoption and investment ratio of cryptocurrencies has not decreased, but increased momentum.
Bank of America strategists warned in a weekly research note that macroeconomic conditions in the US were deteriorating rapidly as the Federal Reserve tightened monetary policy to curb inflation and could push the economy into recession.
In this context, cash, volatility, commodities and cryptocurrencies such as bitcoin and Ethereum could outperform bonds and stocks, said Michael Hartnett, chief investment strategist at Bank of America.
This view has become an important basis for guiding market behavior at present.
Commenting on Goldman Sachs 'plans to expand otc crypto options trading to Ethereum, Bitfinex CTO Paolo Ardoino said it was "inevitable" that institutions would adopt various digital token products. Goldman's plans to expand over-the-counter crypto options trading to Ethereum are no doubt a response to huge pent-up client demand from investors who see the potential of cryptocurrencies.
Judging from the performance of the market funds, there is also a lack of confidence in the DOLLAR market:
Bank of America reported significant outflows from investment-grade bonds again, with outflows of $2 billion this week, while emerging market bond funds increased inflows by $2.2 billion, the highest since September 2021, according to Jin x.
At present, many individuals and institutions simultaneously appear to expand the proportion of crypto assets signal:
Mexico's third richest man holds 60% of his bitcoin holdings, seemingly confirming the importance of cryptocurrencies in portfolios:
Ricardo Salinas Pliego, Mexico's third-richest man, has a net worth of $13.6 billion, according to Trustnodes. "I certainly don't have any bonds. I own 60% of bitcoin and bitcoin stocks in my liquid portfolio. The remaining 40 per cent are hard asset stocks such as oil, gas and gold."
MicroStrategy CEO Michael Saylor said bitcoin is a better fit for MicroStrategy than gold.
Bloomberg's Seyffart cited Saylor's speculation that the company's current position would be significantly different if MicroStrategy had chosen to adopt the gold standard instead of the Bitcoin standard. In his words: If I had chosen gold when I bought Bitcoin, we would probably have about $250 million in gold. Our shareholders will miss out on $4 or $5 billion.
Saylor also said he does not see cryptocurrencies as antithetical to the U.S. dollar, but as having a positive impact on it. Meanwhile, data show that bitcoin has vastly outperformed gold over the past decade. Bitcoin's 10-year return on investment (ROI) increased 955,954% compared to gold's 19% gain.
The more optimistic prediction is that the price of bitcoin will achieve an even bigger breakthrough. In addition to the usual topic that bitcoin will soon reach the $100,000 peak, Peter Thiel, a top Investor in Silicon Valley, predicted in his keynote speech at the 2022 Bitcoin Conference that the price of bitcoin will rise 100 times in the future.
This is in line with a previous estimate of $4.8m by US asset manager VanEck, which believes bitcoin has twice as much upside as gold and could cost as much as $4.8m per coin if it becomes a global reserve asset.
