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Grayscale Investments: Long-Term Bitcoin Uptrend Continues

Grayscale Investments believes that the market is now dominated by bearish sentiment. However, HODL investors will be able to benefit from this.

Grayscale Investments
posted a report stating that before the start of geopolitical tensions in Eastern Europe, the cryptocurrency and traditional markets included in the price of cryptocurrencies only the risks associated with the tightening of the policy of the US Federal Reserve System (FRS). Now investors have adjusted prices to reflect the escalation of the conflict between Russia and Ukraine.

A number of traders are confident that now the Fed’s actions carry great risks, since the regulator, based on the current situation, can raise rates higher and faster than expected. Their opponents, on the contrary, believe that the geopolitical situation will push the supervisory authority to more prudent decisions.

In turn, the authors of the report believe that the Fed will monitor the geopolitical situation and, based on it, adjust the speed of the rate increase. Grayscale believes that if investors become less anxious that the Fed will accelerate the implementation of its policies, then the cryptocurrency market, like the stock market, will show significant growth.

Experts admit that the market is now entirely in the power of the “bears”, and if the escalation of the conflict between Russia and Ukraine continues, this will lower bitcoin even lower. At the same time, there are those who believe that the market has reached the bottom and there is nowhere for it to go down.

Grayscale compares the sentiment that currently dominates the cryptocurrency market to that experienced by traders at the start of the coronavirus pandemic. Despite this, the authors of the report support the bulls and argue that the market is now at a turning point, as the momentum of the bears has already been exhausted.

According to Grayscale Investments, bitcoin, like all high-risk assets, hit the bottom as soon as the conflict arose in Eastern Europe, so now, given the fact that Russia and the United States are not entering the Cold War phase, the cryptocurrency market will grow. The authors of the report note that at the beginning of 2022, there was a correlation between bitcoin with the S&P500 and PCT indices, and even its growth was observed before the conflict escalated. According to experts, it will continue as the geopolitical situation stabilizes.

Grayscale emphasizes that despite the increased risks, long-term investors will be able to benefit from bitcoin’s volatility as bitcoin continues to rise and outperform gold.

Recently CEO of Grayscale Investments
declaredthat the digital currencies of the Central Bank will not force cryptocurrencies out of the market, but, on the contrary, will help the arrival of institutional investors. In 2021, Grayscale Investments reported that 26% of U.S. investors with capital over $10,000 hold cryptocurrencies in their portfolios. At the same time, 55% of respondents bought them in the last 12 months.

Source: Bits

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