Cesare Fracassi, lead economist at the research division of the Coinbase exchange, said that a change in cryptocurrency market forecasts could lead to an increase in the price of digital assets.
As noted in the Coinbase Institute report, market expectations play a key role in shaping the prices of cryptocurrencies: if the market sees prospects, prices rise, if they are disappointed in the future of the industry, they fall.
“The most important pillar of the efficiency hypothesis is that any tradable asset, from stocks to bonds, commodities, and even digital currencies, includes in its price the market’s expectations of the asset’s future value. Thus, according to the concept of market efficiency of crypto markets, only changes in industry forecasts can lead to price changes,” says Cesare Fracassi.
The expert believes that the expectation factor is one of the most important factors that determine the price fluctuations of digital assets. The triple-digit returns on crypto assets that the industry has achieved over the past few years indicate that the outlook for the industry has improved significantly, with market capitalization growing by 860% from 2017 to 2022.
“These figures were achieved due to the fact that the foundation of Web3 (DeFi, NFT, DAO) was laid and the adoption of cryptocurrencies by institutional and retail investors took place,” the expert says.
According to Fracassi, the market now expects crypto assets to become increasingly intertwined with the rest of the financial system and thus be subject to the same macroeconomic forces that drive the global economy.
Recall that earlier the Coinbase crypto exchange announced plans to expand in Europe, despite the downturn in the cryptocurrency markets and recent layoffs in the company.
Source: Bits
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