Avertissement UBS : Crypto Winter arrive

Analysts have warned that the cryptocurrency market may be in for another "winter" of price declines and may not return for years.

On Friday, a report by a UBS analyst led by James Malcolm said the Fed's sharp interest rate hike in 2022 would reduce the popularity of cryptocurrencies like Bitcoin in the eyes of many investors. . Indeed, rising interest rates could erode the idea that Bitcoin is a better value or a premium market. Another important factor is that the technology has many shortcomings and encounters legal problems.

Bitcoin prices have fallen in recent weeks as growing markets believe the Fed will raise prices three more times in 2022. On Monday, Bitcoin fell 1% to $42,722, better than its November high of $69,000.

However, UBS analysts say the situation is to be expected to worsen, leading to a “crypto winter” in which assets cannot recover long after the loss.

The last "crypto winter" happened in late 2017 to early 2018, when Bitcoin fell from nearly $20,000 to below $4,000 and stayed below $4,000 for over a year. which has caused many investors to lose interest in digital assets.

Malcolm and his team pointed out that if the central bank controlled inflation, it would lead to an argument that investors should hold onto Bitcoin to keep prices afloat.

Apart from this, another issue that can bring prices down is the uncertainty of secrecy. For example, UBS analysts say the development of blockchain technology is difficult because, due to its design, everyone in the network must review and identify changes.

The third problem is personalized. UBS said there was widespread speculation that the cryptocurrency network would "lead to tighter restrictions on consumer protection and financial security."

“Stablecoins and (decentralized financial) operations with rising costs will face more problems from the authorities in the coming months.”