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20.11.2022 02:58 PM
Bitcoin has no good reason to show growth

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We have already determined why there is no compelling reason for bitcoin to grow in previous articles. Furthermore, it is highly unlikely that these causes will manifest anytime soon. Because they are concerned about new bankruptcies and scams, traders and investors can keep taking their coins out of funds and exchanges. For several months or years, the overall fundamental backdrop will continue to be unfavorable for risky assets. Remember that the Fed wants to raise the benchmark rate to 5%, which could take an additional four months. The rate won't change after that during the "period of high rates." As a result, it could be a year or longer before the Fed starts to reduce monetary pressure. Naturally, cryptocurrency traders may at some point begin purchasing coins "upfront," figuring out the favorable fundamental background and anticipating a monetary policy easing in the near future. This is known as "buying on rumors." We cannot, however, say at this time that the time has come.

Up to this point, only the FTX exchange and other cryptocurrency businesses have received any attention. Market participants think that other businesses, funds, and exchanges may suffer the same fate as FTX. As a result, the crypto community is currently putting more emphasis on asset protection than driving up purchases. By any means necessary, the "first persons" of the cryptocurrency industry are attempting to stop the market from falling any further (with the aid of "expert" comments). Remember that the price of a bitcoin at the moment is already less than the cost of producing one. This implies that a lot of mining companies could start having liquidity issues.

According to David Zell, a co-founder of the Bitcoin Policy research center, the failure of the FTX exchange will boost trust in cryptocurrencies. He clarified that the core concept behind bitcoin is the ability for each owner to store their coins privately and independently without having to bring them to an exchange. Additionally, he claimed that the market's lack of interest in investing in the FTX exchange's FTT token was its main issue. Zell stated that FTX attempted to artificially boost the value of its token to use it as loan collateral. But this scheme was a failure. Additionally, Mr. Zell counseled investors to remove their assets from centralized exchanges, which it later emerged did not always operate honestly and transparently, and store them separately.

We think that this is a traditional method of market manipulation. When the cryptocurrency market returns to normal and starts to expand once more, everyone will start saying that it is risky to store bitcoin independently and that it is preferable to "trust professionals" in the form of cryptocurrency exchanges and crypto funds. It is currently advised to store bitcoin independently. To prevent further market collapses, it is now necessary to put an end to the panic. And as we can see, a lot of the CEOs in the cryptocurrency sector are doing just that.

Paolo Greco,
Analytical expert of InstaForex
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