What do you think about the Crypto Market? – Ahmad Al Hadidi
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What do you think about the Crypto Market? - Ahmad Al Hadidi
10th July, 2022
Since November 2021, the crypto market cap has fallen from 2.9 trillion dollars to 0.9 trillion dollars. During this period Bitcoin has dropped from its all-time high 69,020$ to 17,588$ shedding just under 75% of its value.
The main trigger for the latest bear market is the rising interest rates and recession fears. Inflation has recorded its highest numbers since 1981, which affected investors’ risk appetite.
The crypto-asset class remains a “risk-on” asset.
Elsewhere in the crypto-verse, the crypto lender Celsius Network (CEL) halted withdrawals and transfers fueling further panic and placing downward pressure on the crypto-asset market. CEL coin has dropped 96%.
BTC Dominance
BTC Dominance is the ratio between the market cap of Bitcoin to the rest of the cryptocurrency markets as defined by Binance, the price of Bitcoin can go down, but its dominance among cryptos can stay the same or go up. Today, Bitcoin’s dominance stands at 43.3%. Price does have an impact on Bitcoin dominance because people tend to get more involved with Bitcoin when the price goes up.
Figure 1: Bitcoin Dominance %
Many experts are warning that this may be the beginning of a “Crypto Winter”; an extended period characterized by falling prices. Investors remain cautious about jumping back to the crypto market at least until traditional financial markets, which have had a similar downtrend, bounce back. The S&P 500 for example closed out the first half of the year down nearly 21%.
Bitcoin is going to Zero
This is a trending theme amongst people reading the news and following influencers. Well, is it possible? of course, anything is! is it probable though?
The price of BTC is ultimately set by the forces of demand and supply.
The number of cryptocurrencies is increasing, in Jan 2022 the number of cryptocurrencies in existence reached 10,397. These projects solve a multitude of issues and in many cases provide a better fiscal service and experience than traditional (or Fiat) currencies. Cryptocurrencies can be used as a payment method in the real world as well as in the Metaverse, which is gaining tremendous traction as user adoption and influx figures continue to exponentially increase, it is in fact expected to co-exist in the next few years as an environment for meetings, gaming and other experiences taking them to a whole new level.
Opinion
In my opinion the latest downtrend of the crypto market is a golden opportunity to start investing in the asset class. I believe a bull market is coming and that BTC could hit a new all-time high north of 69,000$ for Bitcoin and 4,860$ for Ethereum over the medium-term, I maintain this view even if the Bitcoin visited the 5,000-10,000$ level.
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