However, Bitcoin is tested again at its support zone at $41,000. Recently, investment banking J. P. Morgan drew a black outlook for the evolution of the prices of virtual currencies and considered “Cryptocurrencies are likely to crash further as the Federal Reserve raises interest rates.”
For an expert from the North American entity, cryptocurrencies are likely to plummet even more as the US Federal Reserve raises rates of interest, as planned for this 2022, and put end to an era of “crazy” speculation in the markets financials, which includes an exponential jump in “crypto” valuations.
“At some point, I expect to see massive losses in crypto, because there is nothing there,” David Kelly, chief global strategist at JPMorgan Asset Management, told Insider. Investors have shied away from riskier investments as the Federal Reserve prepares to raise interest rates multiple times in 2022 in an effort to rein in inflation.
In addition to these factors, once again the geopolitical conflict increases doubts about the future of cryptocurrencies.
Is it time to buy?
According to a recent study by Glassnode, the volatility in the stock market affected Bitcoin. The correlation between this and the American stock market has come closer than previous years. While there may be short-term catalysts, the long-term adoption of institutional is just beginning. So that it is a good time to take advantage of the current volatility and weakness before big investors take over much of the market.
Graticule Asset Management Asia also highlighted how recent stock market volatility has slowed adoption by institutional investors, albeit momentarily: “Growth stock volatility amid rising interest rates is temporarily slowing the planned forays of institutional investors into cryptocurrencies. Although many traditional institutions have already made the decision to allocate crypto, most have been slow to invest. They don’t want their first foray into space to be a quick money-losing proposition. We believe institutional allocations will wait until global equity markets, particularly growth stocks, have stabilized.”
With the above, Bitcoin could have great potential as more corporations allocate parts of their capital to cryptocurrency in the long run. Compared to other crypto assets, it is less volatile and more constructive for corporate adoption.
Source: Ambito
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