Notes

Wall St Week Ahead Crypto investors face more uncertainty after the rocky start of 2022.


Investors are ready for further flashes of bitcoin and other cryptocurrencies, as worries over an aggressive Federal Reserve threaten to squelch the market's appetite for risk.




The volatility commonly associated with cryptocurrency has been at full display over the past few weeks. Bitcoin , the largest cryptocurrency, is up by about 33% from Jan. 24 and has recently traded at $43,850, bouncing back from drop that cut value in half from November's record peak. Its most popular rival, the ether , is up about 45% since Jan. 24, at about $3,200 after a nearly 56% nosedive from its record high of $4,868, that was in November.








Though advocates of cryptocurrencies have touted their lack of correlation to other assets bitcoin and its ilk witnessed huge gains over recent two years, gaining alongside stocks as the Fed and other central banks released unprecedented amounts of stimulus in the global economy. Bitcoin has risen 1,039 percent since March 2020, and ether has risen 2,940%, though the growth in both cryptos have been cut short by a variety of stomach churning selloffs.








Their recent volatility has occurred amid a broad market selloff that was triggered by investors making adjustments to their portfolios to account for an ever-increasingly aggressive Fed which is scheduled to raise rates as high as seven times this year as it is fighting rising inflation. The index that is the benchmark S&P 500 index (.SPX) is down 5.5 percent from the beginning of the year, while the tech-driven Nasdaq (.IXIC) dropped 9.3%. lost 9.3%.



Beliefs that a more aggressive inflationary cycle by central banks going into the future will harm the risky assets have made it difficult for some traders to maintain their bullish view regarding bitcoin and various cryptos, an asset class already that has been identified as being extremely volatile.








An increase in tensions in Ukraine, where Washington warned a Russian attack could start any minute, could create market turmoil Investors have said. find out more



Bitcoin does "really become the ultimate trend trade, and there are so many risks that can trigger a 40% drop from the midst of the night," said Ed Moya an analyst at Oanda.



The volatility of Bitcoin hasn't stopped analysts from looking to determine the fair value of the currency, or identify possible price levels.



Analysts at JPMorgan believe that bitcoin's actual value to be about $38,000 - some 15% less than its present cost based on the volatility in comparison with that of gold. cardi b make money move is an asset commonly used by investors to hedge their portfolios against volatility in the economy and inflation.



Vanda Research, meanwhile, said in a recent note that the bulk of bearish bets on a lower bitcoin value were put in at around $47,000, and "there may be a large short squeeze if the threshold is met, and retail investors are reintroduced to trading crypto."



In addition, the correlations between bitcoin and the S&P500 reached an all-time high on Jan 31, according the data that came from BofA Global Research, undercutting the logic of those hoping to utilize the cryptocurrency as security against market volatility.




Investors are expected next week to receive minutes from the Fed's most recent meeting on monetary policy, which is due out Wednesday. Walmart (WMT.N) and chip maker Nvidia Corp (NVDA.O) will figure among those releasing resultsas earnings season rolls on.



Some investors are steeling themselves to take advantage of the volatility of bitcoin, hoping that the longer-term value that blockchain technologies offer, its built-in supply limit and the effects the technology creates will continue to last regardless of the frequent price fluctuations.



Jurrien Timmer, director of macro-economics at Fidelity has compared the current Bitcoin speculation to high volatility tech stocks experienced during the dot-com boom more than two decades ago, a boom and bust period that resulted in just a handful of businesses left standing.



"Amazon remains around, as is Apple is still around , and they're bigger than they've ever been and they're hoping that for bitcoin, it'll be just much the same" Mr. Smith said. "But yakuza 0 make money 's not immune to the waves of speculation and sentiment."



Bitcoin could reach $100,000 by 2023, Timmer claims, based on his supply/demand models.



Others believe mature cryptocurrencies like Bitcoin and Ethereum are not likely to achieve the impressive gains that they have racked up since their beginning.



Instead, they're looking at the possibilities of new alternative currencies that are being developed to make use of the money pouring into the cryptocurrency space which includes the metaverse as well as NFTs. The latter saw around $30 billion worth worth of venture capital investments in 2017, according to PitchBook.



Some altcoins include cosmos Terra Luna, and Polkadot that are all down by 20.5 percent as of 38%, 20.5% and 25.5% year-to-date, respectively in accordance with coinmarketcap.com.



The understanding of the risks that come with the financial sector and decentralized banking is going to be one of the most important challenges for investors by 2022, said Lily Francus, director of quantitative research strategy at Moody's Analytics.



Cryptocurrencies "are going to remain unstable in the future, but there are significant players on the institutional side and the retail side who are growing, therefore the interest is growing," said Oanda's Moya.




Homepage: http://www.benhvienvinhchau.com/Default.aspx?tabid=120&ch=15247