Will the volatility ever end? While it might seem unlikely, there are signs that stability could return to the market in the near future.
After forging a minor recovery of sorts earlier this month, the crypto market has returned to exhibiting high levels of volatility over the past two weeks. This trend has pervaded the market since late last year, with the total market capitalization of the digital asset industry having
In his view, the reason for the ongoing choppy price action and lack of liquidity is extreme retail and institutional caution emanating from rising inflation and recessionary pressure. He went on to add that whenever things start to go south with the economy, investments — especially within the realm of crypto finance — tend to start slowing down. Gadit added:
To support this claim, Weiner alluded to his company’s research data, which suggests that from Aug. 8 to 14 alone, a total of 19 projects within the Web3 space raised a total of $501.3 million., nonfungible tokens and GameFi projects raised $82, while decentralized finance , Web3 and infrastructure projects raised a combined $379.3 million. Lastly, various blockchain firms were able to accrue approximately $40 million from various venture capital firms.
“Over the coming year or so, the regulatory turbulence around stablecoins will subside. I suppose clear legislation for stablecoin issuers in the United States will emerge. The growing interest of users in the advantages of web3 and decentralization will push entire industries to adopt digital assets. Lastly, the Bitcoin halving in 2024 will inevitably lead to a new bull cycle in the crypto market. I believe it will start somewhere in the second half of 2023.
As seen from the chart below, volatility spiked right after Singapore-based crypto hedge fund Three Arrows Capital — which had about $10 billion in assets under management — filed for bankruptcy in late July. Zheng to Cointelegraph: