Ok, we might have missed the market drop. It took a while to gather all of these opinions, and, well, the market seems to have bounced a bit. It’s still time to find out what the protagonists have to say, though. In TALKING HEADS, Bitcoinist will ask the experts about the cryptoverse’s overarching themes and latest news. This month’s talking heads seem to agree on one thing: the market drop is a flash crash, a temporary setback.
What are the reasons for the market drop, though? And, did anyone predict that it would recover this fast? What else did they say about the market’s general conditions? Did they imply something about the future? What alpha did they sneak in? Let’s give the experts the mic and find out!
What’s The Reason For The Market Drop & How Long Will It Last? Well…
Chen Li, CEO And Founder of Youbi Capital
Natural cycle of bear market
The uncertainty on how government might legislate crypto given El Salvator, India, USA, and China’s recent responses on policy on Stablecoin and Defi
“We need Defi regulation to make it more accessible to regular people instead of limiting the opportunity to accredited investors. It is not yet clear from the regulators whether money laundering or taxation or some other elements are the major concerns in designing regulation for crypto. But they all seem to be addressable. From the congress hearing last month, it feels like the levels of expertise of the private sector and policy makers are too lopsided for the public to expect any proper regulation to be in place any time soon.”
– Crystal Bai
Santiago Sabater, Founder of DefiChain Explained
“The crypto market and the stock markets have undergone a stronger correction at the beginning of the year after the FED has signalized to raise interest rates. This led many investors to change their position in the market to more “risk-off” investments.
While I expect lower returns in 2022 than in 2021, there will be attractive entry opportunities this year nonetheless. Decentralized finance is one example.”
– Santiago Sabater
Crypto Total Market Capitalization | Source: TradingView.com
Jelmer Rotteveel, Co-Founder of MoonwalkerFM
“I think a lot of people have been anticipating this drop. The market has been cooling off in recent times and there’s been less hype around the crypto space besides NFT’s, so I think people have just been taking some chips off the table. However, because so many have been anticipating this, I’m not expecting this drop will last much further into the future.”
– Jelmer Rotteveel
Garth Howat, CEO of Baanx
“The market drop is in line with the equities market as more traditional investors de-risk from high growth stocks at the start of the year. However, this will not last too long and we expect by March the market to start to recover fast.”
– Garth Howat
Bob Reid, CEO And Co-Founder of Everest
“The overall digital currency market is experiencing another unprecedented flash crash, with the global crypto market cap falling 9.42 percent to $2.03 trillion. While the crash cannot be attributed to a single cause, I believe the minutes from the US Federal Open Market Committee (FOMC) meeting demonstrated the Federal Reserve’s more aggressive monetary policy.
This puts the US on track to expedite its rate hike following more aggressive tightening. Clearly, this update is bad for cryptocurrencies, which are now being adopted as a go-to investment asset by mainstream investors. Conservative, in my opinion, will be forced to return to more stable and secure investment options, rather than what crypto offers, as interest rates rise. This is what is causing the current flash crash.”
– Bob Reid
Adam Mazzaferro, Founder of @Pay
“The key issue affecting the cryptocurrency markets was a hawkish federal reserve which essentially warns of the potential for tighter monetary conditions through possibly higher interest rates. We see this as having transitory effects on cryptocurrency markets as value continues to be created by blockchain and crypto projects in all aspects of economies. Typically tighter monetary conditions accompany an improvement in economic conditions which would also generally be supportive over time.”
– Adam Mazzaferro
Related Reading | Crypto Market Onslaught Continues As Weekly Outflows Reach New Record
And that’s it for today’s market drop exploration.
However, before closing the session…
Talking Heads, “Once in a Lifetime”
This one is from “Remain in Light,” the band’s 1980 album.
Featured Image: TALKING HEADS logo | Charts by TradingView