Analysts call the collapse of FTX the catalyst for a new bullish cycle of cryptocurrencies
Bernstein analysts call the collapse of crypto exchange FTX the catalyst for a new bullish cycle in cryptocurrencies
The collapse of a major crypto exchange cleared the market of "toxic leverage" and showed investors the importance of self-storage of digital assets, experts say
Analysts at investment firm Bernstein believe that the collapse of FTX was the catalyst for a new bullish cycle in cryptocurrency markets, CoinDesk reported, citing the company's report. The collapse of a major crypto exchange cleared the market of "toxic" leverage and showed crypto investors the importance of decentralization and self-storage of digital assets, the report explains.
Macroeconomic factors support bitcoin: the "weakness" of regional U.S. banks and the continued outflow of deposits to money market funds and the big four U.S. banks (Bank of America, Citigroup, Wells Fargo, and JPMorgan Chase) reflect investor fears about "centralizing money," according to Bernstein.
"Any potential shocks, in the credit sector or from the government make bitcoin an ideal 'safe haven asset' alongside gold," the analysts wrote.
Since the beginning of the year bitcoin rate rose by more than 80% - from $ 16.5 thousand to $ 29.8 thousand only in March, against the background of bankruptcies of American banks (Silvergate Bank, Silicon Valley Bank (SVB) and Signature Bank), the first cryptocurrency price grew from $23 thousand to $ 28 thousand.
Bernstein's experts also pointed out that Ethereum fees tripled after the collapse of FTX, reflecting an increase in user activity and interest in the asset itself. Ethereum has risen 75% since the beginning of the year, from $1,200 to $2,100.
At the end of March, Bernstein analysts noted that now there are "ideal conditions" for the growth of the crypto market. Problems in the banking sector of the U.S. may result in a decentralized financial system becoming an alternative to traditional banks, experts say.