2022-1-1 16:50 |
Crypto investors and experts believe the Omicron variant of the COVID-19 pandemic is the primary catalyst behind the recent bear market. While the nascent asset class performed well for the better part of the year, it slumped in December following the discovery and rapid spread of the Omicron strain.
With investors fearing that governments might introduce stricter restrictions, they pulled their money out of risky assets like crypto, sending the market on a downward spiral. At the time of writing, Bitcoin (BTC/USD), the leading crypto by capitalization, is down double digits over the past month despite its price almost doubling year-to-date.
Altcoins have also followed this trend, with Ethereum (ETH/USD), the second-largest crypto, rising 400% since the start of the year. However, it is on pace for its worst month this year since March 2020.
Brian Kelly, the CEO and founder of digital currency investment firm BKCM, believes the Omicron variant caused the US economy to stall. As a result, many macro funds that leveraged BTC as an inflation hedge decided to take profits throughout December.
While he believes BTC could surge past $100,000.00 (£74,325.00) in 2022, Kelly said the emergence of the metaverse might attract investors to the early growth opportunities it offers.
Notably, Kelly’s sentiments are, to an extent, similar to Raoul Pal, the CEO of Real Vision, who said the recent decline in the crypto market emanates from institutional investors taking profits. However, he believes the profit-taking period is over and cryptocurrencies will rally again in 2022.
@RaoulGMI answers fast. Not this time. He needed 6 seconds before answering "Why #DAO is so sexy" but the answer was brilliant.
Less than 30 minutes until the premiere starts. Today, at 19:00 CET, on our Youtube channel:https://t.co/lq96tZHfwq@Arscryptopia @stakeborgdao pic.twitter.com/4rgIev1XLw
According to Lou Kerner, environmental, social, and governance (ESG) concerns over the crypto sector’s energy use have also contributed to the decline of digital assets.
Kerner pointed out that,
Today ‘proof of work’ from the [cryptocurrency] mining machines is looked upon negatively by a lot of the investment community because of the energy it consumes. But if you dig deep, much of the energy is energy that couldn’t be used for anything else. Relative to the massive value we are getting from it, the energy I think will become much less of a concern next year.
While cryptocurrencies experienced a rout in December, the stocks of companies that mine or hold crypto experienced an even sharper drop. For instance, MicroStrategy’s stock is down 21%, while Riot Blockchain and Marathon Digital are down 38% and 31%, respectively.
Per Kerner, investors believe such stocks and cryptos are closely correlated. However, he believes this mindset will soon change because institutional investors are starting to better understand the crypto industry.
He pointed out that most investors are still unable to wrap their heads around mining because it is a small part of the industry. As such, it is easier for them to think of the crypto sector as a basket.
The post Crypto investors blame the current bear market on Omicron and climate change appeared first on Invezz.
Similar to Notcoin - Blum - Airdrops In 2024
Omicron (OMC) на Currencies.ru
|
