thecoinrepublic.com
The Swiss bank has warned that prices may crash in crypto and may not recover for years; the analysis consists of discussion on reasons and possibilities behind the falling of cryptocurrencies prices.
- The prices of various cryptocurrencies surging down have made a skeptical environment among crypto users
- Amidst this, UBS has again expressed concern regarding its price in the upcoming days
- Currently, the global cryptocurrency market is valued at $1.53 trillion, which is almost 47% of its all-time high
UBS, Switzerland’s largest and foreign investment banking and financial services institution, has warned about the possibility of a Crypto market crash. Analysts of the bank, for this regard, have also underlined some concerns and posed reasons behind the crypto winter. The analysis included James Malcolm and other analysts drafting a note for the bank’s clients describing why cryptocurrencies lost their value and charm among users and investors.
The past several days have seen some never experienced before disturbance in the crypto market. UBS has warned about the price downfall of cryptocurrencies so badly that it may not be able to recover even after years. Gradually users who were seeing a store of value in crypto like Bitcoin feel insecure about it.
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Out of various reasons, The Swiss Bank’s analysts have mentioned interest rate hikes by Federal Reserves to be a major reason. High interest rates have made crypto users and investors uncomfortable, reflecting the market value soon after the announcement. It is considered a good store of value for many crypto investors, but now hiking rates may reduce this interest. The appeal of cryptocurrencies would be seen dropping in future simply because of nature to keep investments invaluable assets.
The hiking of interest rates may also not be a one time incident that happened; many prestigious and prominent financial institutions across the world have predicted rates to increase several times in future. If this continues to happen in upcoming times, investors’ trust in cryptocurrencies holding against rising prices will weaken. Due to these reasons, digital assets may lose their value and charm, which heavily attract users and investors.
It has been seen clearly in the past that Government movements always play a key factor in the values of assets in the crypto market. The federal reserves are expected to hike their interest rates many times throughout the year. Goldman Sachs has expected it to be seven times this year, and CEO Jamie Dimon of JPMorgan expects it to be around four times.
Other claims behind crypto downfall are that investors lose interest in bitcoin as an asset or use it as money because of its volatility. Use case of the cryptocurrency does not seem that practical to many users because of its limited supply making it unable to act as a flexible currency. Analysts have concerns about blockchain technology uses and its scalability in future too.