Is The Crypto Golden Run Over? Top Analyst Foresees Troubled Times

Must read

5 Types of Licenses for Financial Advisors

Financial advisors help individuals make informed decisions about their finances, but it’s also important to ensure that anyone you trust to manage your...

Legal Clash: Texas Crypto Firm Files Lawsuit Against US SEC Over Digital Asset Regulation

A Texas-based crypto company, Lejilex, along with the Crypto Freedom Alliance of Texas (CFAT), has filed a lawsuit against the US Securities and...

A Leading DeFi Bull Indicator? MetaMask Registers Over 30 Million In 5 Months

MetaMask monthly active users (MAUs) currently stand at over 30 million, a near 2X surge from around 19 million recorded in September 2023. ...

Bitcoin Bullish Signal: Inflows To HODLer Wallets Hit ATH

On-chain data shows the Bitcoin inflows going towards “accumulation wallets” have hit a new all-time high, a sign that could be bullish for...

The crypto market faces a stormy horizon as a prominent analyst and a report send warning signals about the future of both digital assets and big tech stocks. 

In a recent strategy session, Nicholas Merten, the popular host of DataDash, cautioned that cryptocurrencies and FAANG stocks (Facebook, Amazon, Apple, Netflix and Googlecould experience lackluster gains over the next few years.

Merten’s prognosis encompasses not only digital currencies like Bitcoin but also the broader altcoin space, which has historically seen exponential growth. He attributes this potential underperformance to several factors, with one key element being the contraction of market liquidity.

Contracting market liquidity refers to a reduction in the availability of assets for trading within a market. In the context of cryptocurrencies, it implies that there may be fewer buyers and sellers, leading to decreased trading volumes and potentially more volatile price movements. This phenomenon can occur due to various reasons, such as tighter regulations, decreased investor interest, or shifts in market sentiment.

Impact Of Hawkish Crypto Policies 

One significant factor contributing to this gloomy outlook is the Federal Reserve’s hawkish policies. As the central bank adopts a more aggressive stance on monetary policy, investors may divert their attention and capital away from the crypto market and big tech stocks in favor of more traditional, stable assets. 

The prospect of higher interest rates and reduced economic stimulus could deter riskier investments, including Bitcoin.

Regulatory uncertainty also casts a shadow over the crypto market’s future. Governments worldwide are grappling with how to regulate digital assets effectively. The lack of a clear and consistent regulatory framework creates uncertainty for investors and businesses operating in the cryptocurrency space. This uncertainty can lead to a lack of confidence, reducing overall market liquidity and dampening investor enthusiasm.

BTCUSD slightly above the $26K level. Chart: TradingView.com

Bloomberg Report Reinforces Concerns

Merten’s concerns find support in a Bloomberg report that emphasizes the end of the easy-money era in crypto market making. The report underscores that the heydays of effortless gains in the digital currency world are over. The combination of regulatory scrutiny, reduced liquidity, and shifting market dynamics is painting a challenging picture for crypto enthusiasts.

Prominent analysts like Merten and reports from reputable sources like Bloomberg suggest that both digital assets and technology giants may experience subdued gains in the years to come. 

The contraction of market liquidity, influenced by factors such as hawkish central bank policies and regulatory ambiguity, adds to the growing concerns. Investors and market participants must remain vigilant and adapt to the evolving landscape as the crypto market navigates these stormy waters.

Featured image from Adaptive Capacity Labs

More articles

Latest article

5 Types of Licenses for Financial Advisors

Financial advisors help individuals make informed decisions about their finances, but it’s also important to ensure that anyone you trust to manage your...

Legal Clash: Texas Crypto Firm Files Lawsuit Against US SEC Over Digital Asset Regulation

A Texas-based crypto company, Lejilex, along with the Crypto Freedom Alliance of Texas (CFAT), has filed a lawsuit against the US Securities and...

A Leading DeFi Bull Indicator? MetaMask Registers Over 30 Million In 5 Months

MetaMask monthly active users (MAUs) currently stand at over 30 million, a near 2X surge from around 19 million recorded in September 2023. ...

Bitcoin Bullish Signal: Inflows To HODLer Wallets Hit ATH

On-chain data shows the Bitcoin inflows going towards “accumulation wallets” have hit a new all-time high, a sign that could be bullish for...

‘Avoid Ethereum (ETH) At All Costs’ Says Bitcoin Advocate – Here’s Why

Bitcoin supporter Fred Krueger has recently voiced concerns about Ethereum’s (ETH) fundamental trends and potential regulatory hurdles. Krueger’s remarks, shared in a post...