- Even with the current decline in the cryptocurrency market, there are still opportunities for long-term investors looking for a break.
Long-term investors have an opportunity with the current slump in the cryptocurrency market, which has strong tailwinds that might push Bitcoin to $100,000 by year’s end.
Matt Hougan, the chief investment officer of Bitwise, a cryptocurrency asset management, made this claim in a recent investor note on Wednesday, one day before official U.S. inflation statistics revealed a decline in June.
According to him, there may be a pause in the decline in cryptocurrency values due to inflows into U.S. shortages following a halving of supply, the possible launch of Ethereum spot exchange-traded funds, and a drop in U.S. interest rates are all factors. Federal Reserve, and changes in the political climate in Washington.
According to Hougan, the crypto market is currently dealing with an odd dynamic. The news in the near term is all negative, but the news in the long term is all positive. Long-term investors are presented with a fantastic opportunity by this paradox.
It coincides with the release of data on Thursday by the U.S. The Consumer Price Index (CPI) declined by 0.1% in June after being steady in May, according to data from the Bureau of Labor Statistics. This is the index’s first decline since May 2020.
Everyone’s attention has been captivated by tonight’s CPI release, according to a brief letter sent on Thursday by QCP Capital. Although the equity market has continued to rise, the cryptocurrency market has not yet been priced in this optimism.
The Fed may be more determined to start lowering rates this year if inflation slows down, which would help riskier assets like Bitcoin.
According to the CME FedWatch Tool, traders anticipate an 84.6% possibility that it will occur, so that may happen as early as September.
Investors may find the timing advantageous as Bitcoin’s supply continues to decline following its halving, driving miners to give up as the cost of mining the asset increases.
Although investor sentiment is affected by an overhang resulting from Mt. Gox creditors and Germany’s Bitcoin sales, Decrypt previously noted that this overhang is unlikely to be significant given the demand for ETFs.
Spot Bitcoin exchange-traded funds (ETFs) have attracted approximately $15 billion in net new assets since their January introduction; nevertheless, major wealth management firms such as Morgan Stanley and Wells Fargo have not yet approved their use.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
