Crypto billionaire and Ethereum’s Vitalik Buterin shared his own observations regarding the cryptocurrency market according to Bloomberg:
- Cryptocurrencies bull-run surprised him with its scale and course;
- Sharp upward move created short-term speculation that increased market volatility;
- Buterin believes that the declines in the cryptocurrency market is a time to optimize projects from the technological side and pointed to the risk of many fake projects collapsing during the sell-off;
- Ethereum developers intensify work at this time to refine the Ethereum blockchain and transform the system to the announced version 2.0;
- Vitalik noted the correlation of the cryptocurrency market with the general sentiment of the markets, which are averse to risky investments in times of uncertainty;
- According to Buterin, the cryptocurrency market is slowly maturing and starting to react to the economy differently than before, i.e. similar to mature financial instruments;
- The niche group that had impact on the cryptocurrency market in the past no longer plays such a key role in it and the crypto market is no longer disconnected from the global economy;
- Vitalik Buterin could not determine whether the recent sell-off was caused by the cyclical nature of the market or is the result of a general, perhaps unsustainable fear caused by political and economic factors.
Is the current global situation really that bad for cryptocurrencies?
เริ่มเทรดทันทีวันนี้ หรือ ลองใช้บัญชีทดลองแบบไร้ความเสี่ยง
เปิดบัญชี ลองบัญชีเดโม่ ดาวน์โหลดแอปมือถือ ดาวน์โหลดแอปมือถือThe current situation does not look favorable for the cryptocurrency market. However history shows the financial markets have always reacted with strong, long-term increases after overcoming the problems created by rampant inflation (like during the 1980s and 1990s).
In turn, even large-scale armed conflicts did not cause long-term panic on financial markets. Paradoxically, indexes tended to rise even during such periods, despite occurring panic phases. In this context, many investors may decide to invest in digital assets in the future when a peace scenario is again on the horizon. The US regulator SEC announced that it is still carefully considering the approval of an ETF based on the Bitcoin spot price, which could provide additional support for buyers.
Meanwhile, however, markets are keeping a close eye on the tense situation in Europe and global supply chain issues. Cryptocurrencies, similar to technology companies, are an asset that is not performing well during such periods. However, high volatility is an integral part of this asset class and does not discourage some long-term investors from opening long positions. At the same time, many institutions including Wells Fargo, KPMG or Intel see a long-term growth opportunity for the crypto market.
Ethereum extended recent declines during today's session due to escalating geopolitical tensions. Source: xStation5
