Crypto Winter Will Get Colder According to Industry Experts

Crypto Winter Will Get Colder According to Industry Experts

Tezos co-founder blames venture capital firms for deepening the bear market. 

Rising interest rates should make cash more attractive in the short term.

According to Tezos blockchain co-founder Kathleen Breitman, the endless crypto winter is “only going to get worse.” He said that the industry needs to recalibrate to a world of higher interest rates. Speaking to CNBC on Nov. 2, the industry insider blamed venture firms for the bear market.

Breitman added that the easy money coming into the system boosted the value of some companies. He cited OpenSea as an example. Trading volume in the market collapsed by 88% between September 2021 and September 2022. The comments primarily focused on the inflated valuations of cryptocurrency companies rather than actual asset prices. Tezos (XTZ) has largely fallen out of favor with cryptocurrency traders and investors.

The once-publicized proof-of-stake asset is down 84.5% from its all-time high and is currently ranked 46th with a market cap of $1.2 billion.

Crypto Winter Comparison

Breitman commented that raising interest rates would also prolong the crypto winter and likely make cash more attractive. Binance CEO Changpeng ‘CZ’ Zhao also commented on the crypto winter at the Lisbon Web Summit. It was probably “the only stable thing in this dynamic environment.”

He also commented on the correlation between technology stocks and the reaction to Fed rate hikes. “When the Fed hikes rates and the stock market crashes, they want more cash, so they sell cryptocurrencies. The user base is still highly correlated,”

On-chain Outlook

Earlier this week, on-chain analytics provider Glassnode compared previous crypto winters and bear markets. He explained that Bitcoin has bottomed, and there are “textbook similarities to previous cycle lows.” Now that financial losses have been inflicted, the last thing left is a “time component and investor apathy,” he added

The same conditions applied in the 2014-15 bear market and the 2018-19 crypto winter. This cycle has only bottomed in four months, so it will likely extend well into 2023, especially if interest rates hold. Increasingly. Crypto markets fell marginally the day after the Fed hiked 75 points on Wednesday. Total capitalization was $1.05 billion as the consolidation phase continued.

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