14.02.2023 01:04 PM
Cryptocurrencies may fall to zero

Bitcoin and ether are still losing value despite the risks of an increase in interest rates in the US, particularly in light of predictions for an increase in inflationary pressure in the US in January of this year.

Some American politicians are still pursuing an aggressive stance toward cryptocurrencies. More recently, Christopher Waller, the governor of the US Federal Reserve System, issued a warning that the value of cryptocurrencies would eventually go to zero. The Fed governor pleaded with the public, saying, "Please don't be startled, and don't expect taxpayers to be accountable for your losses."

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Governor of the Federal Reserve, Christopher J. Waller, also highlighted the significant risk associated with cryptocurrency investment. Decentralized finance, in his view, leads to serious issues and threatens the stability of the entire US financial system. "A crypto asset is, in my opinion, nothing more than a speculative asset, similar to a baseball card. Tomorrow's trade will be much higher if individuals think that someone else will buy it from them in the future. If not, its cost will be eliminated." He then added: "Do it if people want to purchase anything like that. That's something I would never do."

The Fed governor said, "If you invest in crypto assets and the price eventually falls to zero, don't be shocked, and don't expect taxpayers to reimburse your losses." In his address, he mentioned several well-known cryptocurrency-related businesses that declared bankruptcy last year, including payment platforms, exchanges, cryptocurrency lenders, and hedge funds, noting that both institutional and ordinary investors were harmed by them.

The Fed Governor voiced concern about the involvement of banks and other financial intermediaries in cryptocurrency activities because of the heightened risk of fraud, ambiguous legal status, and false financial information. He emphasized that "know your customer" and "anti-money laundering" standards must be met by banks that are thinking about taking part in bitcoin activity.

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Regarding the technological state of bitcoin right now, it is still under a lot of pressure. The trading instrument may probably experience another significant sale after missing the $21,700 mark. Only after the return and consolidation around $22,580, which will reinstate the positive trend with the possibility of updating $23,350 and $24,000, will it be feasible to discuss the restoration of the buyers' initiative. The $25,034 level will be the farthest target, where significant profit-taking and a rollback of bitcoin may take place. The $21,700 level will need to be protected if the pressure on the trading instrument continues because a breach would be detrimental to the asset. This will put pressure back on bitcoin and create a direct path to $20,740. The first cryptocurrency ever created will "drop" in this location along with $19,770 if this level is broken.

Ether buyers are currently concentrating on the recovery of the closest resistance level of $1,521, which they earlier this week missed. This will be adequate to level the playing field and eliminate the threat of a new, greater sale. Only after fixing above $1,604 and $1,690, which would return the balance to the ether with the possibility of growth to a maximum of $1,758, will it be feasible to establish a foothold at the highs and continue the positive trend. The $1,819 level will be further-off target. The $1,410 level will be in play if the pressure on the trading instrument continues and the price falls further, below which $1,320 is expected. The trading instrument will reach a minimum price of $1,260 as a result of its innovation, which will be painful for cryptocurrency owners.

Jakub Novak,
Analytical expert of InstaForex
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