I think we can agree on that crypto (in general) have seen a weak January. If we look at BTC we need to go back to 2018 to find a similar month. However, now in February BTC did have a boost and recovered all that was lost in late December and early January. Worth mention is that it is not only crypto that have seen some pullbacks, but we have also seen some small pullbacks on the big exchanges like NSADAQ Composite and S&P500 in New York. In general, it seems like the regular investor want to secure some profit from both the stock- and crypto market, what is understandable if you look at the YOY (year over year) return in both the Crypto- and Stock markets.
You can see some correlations between the pullback of BTC and NASDAQ. Maybe they have some sort of correlation? BTC is pure technology, and the NASDAQ composite is the biggest technology exchange in the world! Taadaaa! We could perhaps compare- and use them till our advantage in our analysis!
However, the above corrections are probably due to the interest rate path from the FED. This leads to capital being channeled out of the riskiest sectors, which unfortunately, happens to be crypto these days.
NASDAQ Composite vs BTC and indexed to 100. [Source: Infront]
January may have had a bearish trend, but still it has been a lot of positive as well, just look at the NFT sector, where more and more giants are pulling on the NFT trend. I'm talking about Meta (FB), Adidas, Twitter, technology giants etc.
What we saw in January now can quickly lead to the idea that we are entering a bear market and that it will slow down on all capital flow into the crypto markets. However, this has not been the case. From this article one can read that the big FTX exchange lands a $32 billion valuation and $400 million in new funding. So, it seems like people/investors are building fortunes in time of writing. Worth mention is that FTX has grown quickly. Two years ago, the Exchange was listed, now it is one of the worlds largest cryptocurrency exchanges – top ten in terms of volume traded!
It is becoming more and more important to approach digital assets for businesses and individuals. We see large companies laying down strategies for how to “hijack” Metaverse with various digital assets. NFTs are already starting to get big, but is that the only thing? At least it helps to promote crypto adoption at a higher level. NFT has been the main driver for adoption lately, much also because we see NFT in almost all crypto. Just take Gaming as one example, where it abounds of NFT in all possible forms, but the bulk is in short supply. So, buckle up guys and get involved in the NFT- and play2earn world.
In the USA one can read that more and more banks have introduced or implemented products that will help the clients get exposure to cryptocurrency. That the banks in Europe will follow this trend as well, there is no doubt. In Asia as well, where India legalized the purchase of cryptocurrency, which btw is a huge milestone and will affect the market somehow. Whether the latter will have a positive or negative effect on the market I do not dare to comment in time of writing. However, what I am looking forward to following this time is when the technology of Blockchain will be implemented in the traditional system and what impact it will have on the prices. January’s corrections are most likely based on the US government that is gearing up to get heavily involved with cryptocurrencies and the market do not agree how this will affect the prices long term, yet. It could “blow” away or it could take us to the moon. As always, time will tell!
Cheers hivers!
-Olebulls
