In its Q3 report, Saxo Bank notes that cryptocurrencies are currently in limbo, awaiting overall macroeconomic results.
- Saxo Bank says crypto market is ‘in limbo’
- He says the crypto ecosystem is awaiting several economic factors
- However, he sees opportunities in the bear market.
- Says Bitcoin lost correlation with gold
Saxo Bank a Danish investment bank specializing in online trading and investment, said that the current state of the cryptomarket puts the sector at “a limbo” amid heightened uncertainty marked by significant price corrections.
En su informe de perspectiva del tercer trimestre para las criptomonedas, publicado hoy, el banco añadió que el próximo movimiento del precio del mercado dependerá de factores como la perspectiva económica general y la posible competencia de la investigación continua sobre las central bank digital digital technologies are these electronic tools that have the ability to generate, store or even process data. currencies (CBDC).
Among his most notable phrases, he said:
“Cryptocurrencies are currently in limbo, awaiting changes in general macroeconomic sentiment, regulation and institutional adoption, not to mention the ongoing investigation into central bank digital currencies as a potential competitor” .
On the other hand, Saxo said advocates see the current bear market as an opportunity for the industry to recover, believing it presents room for further investment and market stability.
On this he pointed out:
“Pessimists see 2022 as the beginning of a crypto winter, where lower crypto prices and reduced participation in crypto applications will decline hand in hand in a negative feedback loop. On the other hand, optimists expect a positive spiral if the appetite for crypto investment increases, raising the price and enthusiasm for participating in crypto technologies. They see the bear someone who believes that prices in a given market will decline over an extended period. Such a person might be referred to as “bearish.” market an area or arena, online or offline, in which commercial dealings are conducted. as an opportunity to get ready for the next bull a person that is optimistic and confident that market prices will increase, this person is also known to be "bullish" about the market or price. run and as a healthy cleaning of the crypto space The market, which can regain some of the stability and reliability that was lost during the first half of 2022-.
It’s not like gold
The bank’s report also states that, although the offer of Bitcoin the biggest and most popular cryptocurrency in the world. It is a decentralized digital currency that enables users to make trustless peer-to-peer transactions. is limited as is physical gold, and it has been said that this crypto is the “21st century gold”, from a technical point of view, “the correlation between Bitcoin and physical gold was significant throughout 2020 and early 2021, however, market events in 2022 have erased this narrative and the correlation between the two is now low.”
Añade: “Concerns about the use of cryptocurrencies as a store of value grew further in May when a stable currency currency is a medium of exchange that defines value. turned out not to be stable. TerraUSD’s disengagement a token a digital unit designed with utility in mind, providing access and use of a larger crypto economic system. that is supposed to be pegged to the value of USD $1, raised even bigger concerns about the stability of the cryptocurrency.”
Bitcoin and Nasdaq, similar?
The bank also reflects:
“So what kind of investments are cryptocurrencies? Looking at the correlation between the Nasdaq-100 index and Bitcoin, the correlation in 2022 is at a record high. Therefore, cryptocurrency cryptocurrencies are digital currencies that use cryptographic technologies to secure their operation. investments behave more like regular high-risk assets with similarities, especially with tech stocks. This applies not only to Bitcoin, but to most of the major cryptocurrencies.”
“The fact that more professional investors are considering cryptocurrencies for their portfolios makes these cryptocurrency investments fall into a risk management framework, in contrast to speculative traders during previous cryptocurrency bubble when an asset is traded at a price exceeding that asset's intrinsic value. trends. The framework generally reduces portfolio a collection of cryptocurrencies or crypto assets held by an investment company, hedge fund, financial institution or individual. risks during volatile market periods, leading to a massive sell-off in cryptocurrencies similar to that of high-risk stocks, and thus proving that correlations are high. During these times of high correlations, cryptos are less likely to add diversification diversification is a risk-management strategy that mixes a wide variety of investments within a portfolio. to a portfolio to spread a price difference between asking and selling prices of the asset. risk.”
Strict crypto regulations
Consequently, Saxo points out that the crash will potentially trigger tougher regulations than expected, as it has raised doubts about the stability of cryptocurrencies. This comes as different jurisdictions continue to debate the right crypto regulatory framework.
According to the bank, the widespread collapse of cryptocurrencies in 2022 requires all sectors to work in harmony, as it has raised doubts about whether the industry can withstand the pressure and grow. According to Saxo:
“This requires all parts of crypto networks to function properly, as well as the synergies between these: the crypto merchants, the facilitators/developers and validators, not to mention the use cases for the specific crypto token.”
It is worth noting that Saxo Bank spinning one 2017 “outrageous prices” (for the moment) of Bitcoin.
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