The world of cryptocurrencies is undoubtedly an exhilarating spectacle where anything can happen. One moment that has recently caught our attention is the prediction by some market analysts that Bitcoin could soon hit the $22K mark. The rationale behind this prediction is explored by Marcel Pechman, an analyst from Cointelegraph.
However, one cannot ignore that this prediction comes amidst worsening investor sentiment. This shift in the market’s mood was notably after the Grayscale Investment’s much-awaited legal victory against the United States Securities and Exchange Commission (SEC) on Aug. 29, and its subsequent postponement of multiple Bitcoin exchange-traded fund applications.
Adding to the cryptocurrency’s tribulations are multiple lawsuits coming from the SEC against exchange platforms, including Binance and Coinbase. These allegations range from money laundering to facilitating trades from Russian entities. And if these weren’t enough, there are also claims of a possible indictment from the U.S. Department of Justice hanging over the sector’s head.
Yet, it’s not all gloom and doom. There is a flip side to this coin. The drop-down of U.S. inflation to 3.2%, along with the U.S. Federal Reserve’s move to drain liquidity from the markets, might work in favour of cryptocurrencies, including Bitcoin. This is because these measures could push investors to seek alternative assets such as Bitcoin for their portfolios.
This optimistic perspective is shared by BitMEX founder Arthur Hayes, who argues that the bull market for Bitcoin has already kicked off since March. According to Hayes, the fallout in the Silicon Valley Bank and the subsequent intervention by the U.S. Treasury Department became the turning points for the cryptocurrency market. However, Pechman, albeit sharing Hayes’ positivity, points out the obstacles Bitcoin still has to overcome, especially regarding the $22K milestone.
There is also concern about the U.S. Dollar Index, which gauges the dollar against other major foreign currencies like the Euro or Swiss Franc. Pechman underlines that this index now stands at the same level it had six months back. It seems investors now realise that if a global economic recession were to hit, other countries would likely collapse before the U.S.
In conclusion, while there are indeed some big risks out there for Bitcoin – including lawsuits, regulatory scrutiny, and the global economic condition – this has always been part of its journey. As Pechman concludes, if the markets have realised anything about Bitcoin, it’s that whatever tribulations it faces, Bitcoin will always find a way to fuel its rebellious streak and keep moving forward.
Source: Cointelegraph
