We’re in a crypto winter. There’s no denying it. The fact that bitcoin could lose over 70 percent of its value in just under a year is crazy. Many thought that bitcoin and other forms of crypto were unstoppable and likely to reach prices that could never have been believed. While this happened, those prices are considerably lower than what most diehard traders were expecting.
Bitcoin May Need More Time to Fix Itself
Now, it looks like things are about to get worse as many analysts believe the crypto winter that we’re currently enduring isn’t likely to begin showing signs of ending until the year 2024. At the time of writing, more than $2 trillion has been wiped off the crypto slate as the space has lost loads in valuation. As inflation has grown rapidly, the Fed has had no choice but to give in and increase rates as a means of trying to fight the ongoing spikes witnessed in food and gas prices.
This has ultimately come back to bite assets like bitcoin in the butt, and many are suffering due to the harsh economic downturn countries like the U.S. are witnessing. The idea that bitcoin could potentially serve as a hedge against inflation has been challenged, and the currency, in many ways, has failed to live up to its hype from two years ago.
Solana Labs co-founder Anatoly Yakovenko explained in a recent interview why he thinks the current state of the market could last into the year of the next presidential election. He says:
Looking at macro stuff, my guess is there’s probably 12 to 18 months more of these brutal Fed rates going up, but there is an end to it, and just like the last bear market, a lot of teams built and focused on product-market fit and really tried to build amazing products. A lot of those succeeded, I think, in a very dramatic way.
Things Could Be Slow
We are very close to the midterm elections of the U.S., and many governors and members of Congress are about to see their positions challenged by newcomers within the next few days. Faud Fatullaev – chief executive of web3 ecosystem We Way – said this isn’t likely to help bitcoin reach new highs, commenting:
While the current momentum might push the coin to the $20,500 to $21,000 range in the next few days, the chances that this growth will be sustained in the mid-term[s] are uncertain. It is somewhat difficult to pinpoint what is fueling the current growth trend in what appears as a natural retail buying momentum for the premier digital currency. However, investors and traders will need to keep in mind that the nascent asset class still has a tremendous correlation with the broader financial market which also still has a lot of headwinds ahead.
Source: https://www.livebitcoinnews.com/analysts-bitcoin-wont-recover-until-2024/