Bitcoin: decentralized and thus globally influenced.
The war in Ukraine is also affecting the crypto market. Bitcoin and Ethereum, for example, have lost significant value in recent days, with some altcoins experiencing even more serious declines. For a long time, the crypto market had developed in isolation from the rest of the market – this is now apparently over: In January 2022, a study showed that the prices of the leading cryptocurrencies are increasingly moving in line with the two major stock indices, the S&P 500 and the Nasdaq 100. A comparison makes certain: falling stock prices are now also increasingly accompanied by falling cryptocurrency prices.
Bull market, please wait
Is a new crypto winter now imminent, given the downtrend that has been initiated and the Ukraine-Russia conflict that has broken loose? Du Jun , founder of the crypto exchange Huobi expects the next Bitcoin rally only with the end of 2024. Microstrategy boss Michael Saylor or experienced traders like Peter Brandt expect a longer-lasting crypto winter, i.e. low prices of Bitcoin, Ethereum and Co. Likewise, Du Jun hardly believes in a noticeable recovery of the crypto market. The founder of the crypto exchange Huobi assumes, against the background of past price cycles, that a new bull market is not to be expected until the end of 2024 or early 2025. Speaking to CNBC, he expressed that the bitcoin price is strongly related to the so-called halving. Bitcoin halving, the event hard-wired into the cryptocurrency’s programming code, occurs roughly every four years and halves the reward for mining. One of the main reasons for halving is to prevent potential inflation. The last halving took place in May 2020. Subsequently, the BTC price went steadily upwards and reached its all-time high of almost $69,000 in November 2021. Since then, the BTC price has almost halved and is currently trading below the $40,000 mark. Now, according to Du, the time has come for Bitcoin and Co to enter a bear market, which will last another three years or so.
War, Corona & Co
However, the Huobi founder admits that the further development is very difficult to predict because it depends on so many other factors. These include geopolitical problems such as the war in Ukraine mentioned at the beginning of this article, as well as the Corona crisis. In addition, regulatory steps in larger markets such as China have recently led to falling prices. Microstrategy CEO Saylor, for his part, emphasizes that for him Bitcoin is “more of a marathon than a sprint.” This is echoed by trader Brandt, who believes that Hodlen is the best strategy. The important thing for him, he says, is that people should not expect “overnight gains.”