In the last two months, crypto markets have seen huge corrections. The worldwide cryptocurrency market valuation has dropped to $949 billion today, down from a high of $3 trillion in November 2021. Weak global cues, along with rising inflation and interest rates, have resulted in a major sell-off in cryptocurrency markets. Investors and traders are now speculating on whether the cryptocurrency markets will recover this year. Experts in the crypto business have differing opinions on the subject.
Experts in the Crypto Business
While some analysts anticipate that the cryptocurrency markets will recover in the next months, others feel that investor skepticism will linger in the near term.
“I am confident that cryptocurrency will climb once more.” The bloodbath and crypto winter should be finished by August 2022. Bitcoin might reach an all-time high of $70,000 by the end of December or early January 2023, according to Dileep Seinberg, creator and CEO of MuffinPay, a bill payment, and utility token.
“Crypto is getting recognized for its purpose and utility for a few significant reasons aside from geopolitical uncertainty. Later this year, government rules will be a major driver,” he noted.
Cryptocurrency and Financial Markets
Because inflation is expected to last for another two years, experts believe that a looming economic downturn will render crypto markets even more vulnerable.
The link between cryptocurrency and financial markets is becoming stronger. Cryptocurrencies have reacted in lockstep with global financial markets, which have also been impacted by negative global cues.
“The Fed faces a difficult balancing act in lowering inflation without provoking stagflation. If the Fed keeps raising interest rates, a recession will loom, sending stock and cryptocurrency markets into a spiral. “The Crypto Learning markets will remain shaky, and investor apprehension will prevail,” he warned.
“Macroeconomic headwinds such as decade-high inflation and rising commodity prices have a negative influence on crypto markets due to their significant co-relation.” The strong stance of the US Federal Reserve on quantitative tightening to combat inflation will exacerbate the downward trend in crypto prices. “Inflation will be present for a couple more years and is not transitory in nature,” said Sharat Chandra, vice president of research and strategy at blockchain-based identity management platform EarthID.
According to Rajagopal Menon, Vice President of Next Cryptocurrency to Explode WazirX, worldwide inflation has been a big source of anxiety for investors. It is at a 40-year high of 8.6% in the United States and 9% in the United Kingdom.
“Interest rate hikes in major crypto countries are also a rising source of concern, as they reduce liquidity. The combination of both signs has resulted in a major sell-off. The Indian rupee has hit a record low of 78.28 after the central bank boosted the full-year prediction for the FY23 consumer price index to 6.7 percent, which is higher than the objective. As a result, investors are taking a wait-and-see approach because the early indicators are negative. This unfavorable market trend is likely to continue in the near future. Share your thoughts with the help of write for us