Omicron, Climate Rule the Roost in Crypto Market

• The crypto market is experiencing some notable changes, making the investor sentiment weaker, which has stayed undeterred mainly in the previous few years.
• Bitcoin marked a milestone by touching the $67,000 mark back in November, but has gone down since.
• As crypto-mining consumes too much energy, it is assumed that the prices of digital assets might go down.

Will Bitcoin Stand a Chance Against Changes?

The Crypto market is going through some noteworthy changes, weakening the investor sentiment continuously, which has mainly stayed undeterred in the previous few years surrounded by lacking rules and less expensive liquidity forced into weather the pandemic.

The future of the virtual monetary vehicle will be set by how robust the rules will become, an element equally crucial to how the assets perform, the capital gain tax, that has been postponed for another year.

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Some state that it is not clear that the father currency, Bitcoin, would be able to stand against the tide of changes in the circumstances of macro-economic market inimical to the investors, noteworthily the end of attenuating the United States Federal Reserve and ensuing rate hikes in the upcoming year.

Others state that higher volatility of price may become utmost at some times. Still, the whole uptrend would not become elevated, an assessment indicating the continued elevation of greatly risk-averse institutional investors, whose conduct depends on profit’s guarantee.

Back in November, Bitcoin reached a $67,000 mark, but since then, it has been down consistently.

This is just a slice of sizable fluctuations in price over the previous year, starting at $25,000 in January. It then marked a fresh high in the next 3 months before reaching $59,000 in March, then $67,000 in April.

The reason for the sudden elevation was the listing of Nasdaq in a US crypto exchange, Coinbase Global, part of high hopes that the crypto asset will finally become a part of the legal monetary investment mechanism faster than anticipated.

The probability of the Crypto asset tagging the $84,000 mark fell down thereafter since the inflation-struck asset is depressed relative to the extreme depreciation in the economy’s value.

But the prices fell abruptly in November and December, affected by the sudden introduction of the Omicron variant and the announcement regarding elevated capital gain tax rates by the Biden administration, which will be raised from 20% to 39.6%.

Anti-Green Assets

Also presenting a downside risk is crypto asset’s criticism regarding its anti-green features surrounding the continuous outspread of environmental, social, and corporate regulation (ESG) drive.

As per some market monitors and advocates of the environment, extreme power consumption for mining the digital asset will become the reason for the asset’s price fall, since reliability on carbon-heavy electricity will be reduced heavily.

An industry official stated that “Cryptocurrency certainly has growth potential, but the risks and volatility are just as great.” “How the new financial investment adapts to the new environment will set the price and trading volume.”