Bitcoin, Ether, BNB and most cryptocurrencies in the market are likely to continue to lose value in the coming months, warns a Swiss bank. Experts believe that investors will momentarily turn away from the sector.
In 2021, the cryptocurrency market exploded. Driven by the trusted brands of firms like Tesla, PayPal, Visa or MicroStrategy, the digital currency sector has reached the 3000 billion dollars of capitalization end of last year. The doyenne of the sector, the essential Bitcoin, even climbed to the gates of $70,000 in November.
After this bullish phase, the cryptocurrency market has recently contracted. Considered as risky speculative assets, digital currencies have been neglected by investors, whether individuals or institutions. All markets reacted to recent announcements from the US Federal Reserve. After two years of activating the printing press to stimulate the economy, the central bank has decided to gradually end measures to stem inflation.
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Swiss bank predicts another cryptocurrency winter
According to financial experts atUBS, the largest bank in Switzerland, the decline in the cryptocurrency market is likely to be prolonged over time. Analysts fear a new “cryptocurrency winter”, similar to the one that marked investors between 2018 and 2020. During this period, the value of digital assets has stagnated or fallen. Many projects then disappeared from the radar.
According to UBS, it is possible that the price of digital currencies, including King Bitcoin or Ether, will not not go back several years. UBS analysts point to the actions of the US central bank, which is expected to raise interest rates several times in the course of 2022. These decisions are likely to limit the amount of liquidity available in the markets.
Analysts also say investors fear upcoming regulation on the cryptocurrency market. The speculation “inevitably calls for closer oversight to protect consumers and safeguard financial stability”. Cryptocurrency exchange platforms, such as Binance, have also been hit with several restrictive measures in recent months.