A seasonal crypto pattern points to more losses for Bitcoin in December following the seismic collapse of the FTX exchange.
A seasonal crypto pattern points to more losses for Bitcoin in December following the seismic collapse of the FTX exchange.
According to data compiled by Bloomberg.
This pattern is evident in 2018, 2019 and 2021, making December’s average drop close to 11%. If history repeats itself, cryptocurrencies could lag behind equities as heightened expectations of this quarter’s equity recovery will continue ahead of Christmas as the Federal Reserve moves to new markets. smaller rate hikes.
“The digital asset class is going through a contagion phase in which the credit risk assessment of its counterparties is going through,” said John Toro, head of trading at digital asset exchange Independent Reserve. cooperation and ability to pay is still a must. “It seems very likely that in this period of heightened credit risk, Bitcoin will underperform other high beta risk assets.”
The cryptocurrency market wobbled in the period surrounding the November 11 bankruptcy of Sam Bankman-Fried’s FTX trading platform and sister investment firm Alameda Research. They stabilized as the month passed, supported in part by signs that the Fed will switch less aggressive monetary tightening.
Richard Galvin, co-founder of fund manager Digital Asset Capital Management, said: “We would favor a more stable, positive December given some extreme fear and extreme extrapolation. of the contagion will decrease”. “Plus, the macro environment is still more positive — for the time being.”
The traditional and digital financial worlds are still overwhelmed by the wreckage of FTX, which at one point was valued at $32 billion but the founder of Bankman-Fried now claims to have only $100,000 in the bank.
Former Chairman of the Federal Deposit Insurance Corporation Sheila Bair said WE Regulators “need to crack down” on the most problematic aspects of cryptocurrencies following the collapse of FTX and related entities.
Galaxy Digital CEO Mike Novogratz dropped his forecast for Bitcoin to rise to $500,000 in 5 years, citing tightening monetary policy, adding that the token is ultimately will reach that level.
Bitcoin was little changed and traded just under $17,000 as of 12:25pm in Singapore, while Ether ranked second steady at $1,272. A gauge of the top 100 tokens has dropped more than 60% this year amid a protracted crypto trend that has toppled several digital asset businesses.
