Crypto bulls and crypto bears go against each other.
The favorable news is that BTC prices had increased by almost 10% on Tuesday. The bad news, though? The traditional and cryptocurrency markets are still circling multi-year lows. A series of unfavorable events, including rising inflation, a broken supply chain, the end of the COVID-era stimulus, and the conflict in Ukraine, have eliminated trillions of dollars in investment gains. So we wanted to know what the smart money — from Wall Street and beyond — believes will happen next because the Fed is predicted to increase interest rates at least three more times during the upcoming several months. What they have to say is as follows:
- Recent research from JPMorgan claims that Bitcoin “has substantial upside from here” and has replaced real estate as the company’s “preferred asset” as an “alternative investment” when interest rates rise. According to the paper, consistent venture capital investment into cryptocurrencies would help prevent a “long” downturn in the market. And last October, the bank took part in a $60 million fundraising for the blockchain analytics company, despite the CEO’s prior record as a vocal cryptocurrency skeptic.
- With Andreessen Horowitz (a16z) unveiling a record-breaking $4.5 billion cryptocurrency fund, investment in the technology is showing no signs of diminishing. The addition of the new fund takes the company’s total assets in crypto-powered internet technologies (also known as web3) to $7.6 billion. Many business influencers helped guide the early internet era and have survived downturns like the dot-com disaster of 2000, sees significant connections to past times: “This is the only instance in which I have ever compared something to the internet… I take the analogy seriously. We might envision the blockchain powering the entire world’s economy.
- Hedge fund king explained why he included some Bitcoin in his portfolio at the World Economic Forum last week in Davos. “We’re in an atmosphere where we’re going to question, ‘What is the new money? What kind of currency can we transfer between nations that serve as a store of value and a medium of exchange? Over the past 11 years, Bitcoin has accomplished a great deal. Similarly, a billionaire value investor continues to support Bitcoin: “I consider Bitcoin an insurance policy against financial calamity.”
- However, not everyone in attendance at Davos was as upbeat; Some suggested that BTC may not bottom out until $8,000 instead. Previously predicting that Bitcoin will reach $400,000 in December 2020, experts claim that “Bitcoin and any cryptocurrency at this moment have not established itself as a genuine institutional investment.” According to other Davos participants, bear markets offer more than just suffering. Other founders said that, “It’s excellent because it’s going to clear the people who were there for evil reasons.” Because everyone is struggling, “the legitimate ones will be able to concentrate just on developing on constructing and forget about the worth of the token.”
Market observers anticipate additional turmoil as interest rates rise over the upcoming months, but do rising interest rates necessarily translate into falling cryptocurrency prices? For hints, we can look to the past. U.S. interest rates increased from 0 to 2.5 percent between 2016 and 2019. BTC? It grew from nearly $400 to more than $10,000. Some of the world’s biggest banks and venture firms seem to remain bullish on the technology’s future. They are positioning themselves to ride the next wave, regardless of whether we’re in the midst of a full-blown crypto winter or are just weathering a shorter-term storm.