An American multinational bank in its recent findings revealed that the coming future for the top cryptocurrency looks positive. Citi bank in its recent study concludes that the crypto market might have witnessed its worst this crypto winter. BTC’s price has reduced to more than half since its ATH recorded in November leading to the dramatic collapse of the crypto market.
The melodramatic collapse of LUNA has again made investors skeptical about cryptocurrencies. In a month, the cryptocurrencies, Terra (LUNA) and TerraUSD (UST), went from their best to worst.
The decline in the value of assets caused panic among investors. Investors pulled out their funds leading to the de-pegg of Tether (USDT) which lost its peg. It also forced several large companies to perform major layoffs. The chills of crypto winter were then felt by prominent crypto firms eventually causing a liquidity crisis. However, many factors now indicate that the worst is done.
Citi also mentions that although the broader economy or financial sector suffers no direct impact due to crypto markets since they are not large enough currently. However, these markets do have an influence on investor sentiment. The bank report suggests that the contagion fear reached its peak for some time at least.
In a statement to CNBC, financial analysts stated that they have zero concerns about the wider impact of crypto on the U.S economy. Since they are both the sector is not linked to debt. Joshua Gans, an economist at University of Toronto, shared his thoughts on the whole relationship between the two sectors. Gans says people for real-world commitments usually do not use crypto assets as collateral. Gans further said, “Without that, these are just wasted paper. Therefore, this issue is at the bottom of the list of economic concerns.”Moreover, the bank said outflows from ETFs and stablecoins are pointing towards stabilizing. In addition, the discount of Coinbase has also come back to regular.
Source: https://www.thecoinrepublic.com/2022/07/24/citi-report-suggests-worst-is-over-for-crypto-liquidity-bitcoin-is-back/