Volatility in the cryptocurrency market could continue until 2023 according to DeVere CEO, Nigel Green. In a recently released market analysis, the CEO of the company informed that investors will use this opportunity to bolster Bitcoin (BTC) and Ether (ETH) holdings. Over the last few years, Bitcoin and Ether have been highly correlated with traditional financial markets, something that had an impact on investment strategies.
DeVere Group CEO Believes Market Volatility Will Continue
Investors should expect continued volatility in the crypto market in the coming months, at least until the end of the year. This is what the CEO of DeVere group believes that will happen in the crypto industry due to the current correlation between Bitcoin, Ethereum and traditional markets.
Nigel Green’s comments come at a moment in which central banks around the world continue to raise interest rates amid an inflationary crisis not seen in decades. Of course, some countries are in a worse situation than others, but the trend is clear: raise interest rates to stop inflation.
During 2020, central banks printed large amounts of money to help people during the pandemic that affected the whole world at that time. However, they underestimated the negative effects that this could have had on the economy. Supply chains have been very much affected due to this reason, and prices, especially energy, food and housing, have skyrocketed.
About the future of the market, Nigel Green said:
“Markets are now predicting that policymakers at major central banks, including the U.S. Federal Reserve and Bank of England, are likely to remain resolute in pumping interest rates in their battle to beat down unexpectedly stubborn inflation.”
It is also worth pointing out that the European Central Bank (ECB) is among the largest banks in the world not to have increased interest rates (so fast). Indeed, they are lagging behind in terms of interest rate adjustment, which could create even more volatility in the near future, especially as inflation surpassed over 20% in some of the Eurozone countries.
As per the report released by DeVere Group, higher interest rates mean stock markets decline in value. This happens because companies borrow less money, and therefore, their earnings will also grow at a slower rate than investors previously expected. Therefore, there could be a ripple effect on most sectors, including digital currencies, which have been traded very similar to stocks and traditional financial markets.
“Given Bitcoin and Ether’s current correlation with stock markets, we anticipate further, perhaps heightened, volatility in the crypto market before the end of 2022,” DeVere CEO said.
According to data shared by CoinGecko, one of the most popular crypto price aggregators online, Bitcoin has now a price per coin of $19,500 and a market capitalization of $374 billion.
It is worth taking into consideration that over the last two months, Bitcoin was traded between $18,500 and $22,000. In the last month alone, stability was even larger. BTC was traded between $18,500 and $20,400, which shows that investors are not decided about the current direction of the market.