The host of the DataDash YouTube channel with more than 500,000 subscribers doubts that the crypto market capitalization will be able to grow tenfold in the coming years due to a decrease in liquidity in the markets.

Nicholas Merten suggested that in the near term, cryptocurrencies, along with shares of FAANG companies (Facebook, Amazon, Apple, Netflix, Google, Microsoft and Apple) will show mediocre returns. Merten explained his pessimistic forecast by the tightening of the liquidity situation in international markets due to the policies of the US Federal Reserve System (FRS).

The analyst suggested that the cryptocurrency market, whose market capitalization is currently around $1.05 trillion, will have a much harder time expanding to $10 trillion compared to its growth rate from $100 billion. According to Merten, the current economic situation is characterized by reduced liquidity. For cryptocurrencies to experience a new bull market trend, there needs to be a significant increase in cash liquidity and an increase in the intrinsic value of securities.

However, the current approach of the Fed to reduce its balance sheet by about $100 billion monthly is working against it, the presenter is convinced. Interest rates set by central banks, including the Federal Reserve, are now at their highest levels since 2007. These rates are comparable to those observed in the early 1990s, as well as during the inflationary period of the 1970s.

Two weeks earlier, Merten expressed doubts about the future of Bitcoin and Ethereum. The analyst noted the lack of bullish momentum for these crypto assets and warned that a further decline in the crypto market is inevitable. According to DataDash’s forecast, if the bulls don’t step up soon, ETH could fall below $1,000.

Previously, the cryptanalyst said that whales and institutional investors accumulating Bitcoin are driving the BTC price higher, while short-term investors and leveraged traders are causing it to fluctuate.