The volatility witnessed in the cryptocurrency space will not last forever, as the market is expected to witness a rebound, as it is still a very young industry.
This was disclosed by Temisan Agbajoh, a DeFi analyst, during Nairametrics’ Investment Webinar on Saturday.
According to him, the market is expected to witness a rebound due to reasons peculiar to the nature of the market.
What Agbajoh is saying about crypto rebound
He said, “In a bull market, everybody is a genius but in a bear market everyone will preach gloom and doom. The market is still a very young industry and it does not have as much bearing as markets like the commodities and stock markets that have been around for a number of years.
“Looking at the market capitalisation, if we are playing this game on a global scale and if we are very objective, $10 trillion in the crypto market space is a very conservative number over the next five years based on adoption.
“If $10 trillion enters the cryptocurrency now, that will be Bitcoin at least a 10x from this current prices. I do not believe the year of high returns is over. There will always be another Bull and Bear market. What I want people to think about is the technology they are investing in, why are they investing in it and why do they believe in crypto.
“For instance, in the stock market, Tesla stock skyrocketed and it also went down. The high returns in the crypto will come back. The only time the high return will not be back is when you no longer see the 5% increase in Bitcoin but 0.5% or 1%, that is, when Bitcoin has a more stable price.”
What you should know
Nairametrics reported that Bitcoin led a drop in digital assets across board, with the world’s most valuable token expected to lose for the eighth week in a row, its longest such dip since August 2011.
Bitcoin’s price has dropped by 4% in the last seven days. Even though this may appear to be a significant loss, the overall market took a bigger hit.
- Altcoins were hit far harder than BTC, resulting in Bitcoin’s dominance skyrocketing, buffeted by both macro headwinds from the U.S central bank monetary tightening and crypto-specific fallout from the TerraUSD algorithmic stablecoin’s implosion earlier this month, which continues to weigh on digital assets, particularly those related to decentralized finance.
- In the past 7 days, Ethereum has lost roughly 12% of its value, followed by Cardano, which has also lost 12%, and Solana, which has lost a stunning 20% of its dollar value.
- In total, the crypto market dipped by $500 billion in market value in May, a drop of 29%.
- Digital assets fell for a second day, despite risk assets like stocks rising, signalling a departure from their recent lockstep relationship — and a hint of fragile belief that might augur a worrying trend.
- As investors gain confidence in the markets as a whole, they’re seeking new opportunities to buy on the cheap. They don’t want to be burned in the cryptos once more.”
- Ether, the second-largest cryptocurrency, and other altcoins tied to prominent DeFi projects such as Avalanche and Solana were among the worst performers on Friday, falling between 4% and 6%.
- Market data suggest that even popular collections like Bored Ape Yacht Club and CryptoPunks are under pressure in the nonfungible token market. Meanwhile, short interest in the first US Bitcoin-futures backed exchange-traded fund is reaching its all-time high, with investors increasing bearish bets since the fund’s debut in October 2021.
- With the fallout from Terra’s demise wreaking havoc on altcoins, Bitcoin now holds a bigger share of the cryptosphere, accounting for 44% of total market value. According to CoinGecko data, this is the highest level since October, just before the latest bull market peaked.
- But it’s not like Bitcoin is unaffected: It’s currently down about 60% from its all-time high in November, albeit it’s been trading in a $28,000 range.
- The tight association between cryptocurrencies and other risk assets has recently broken down, without a doubt. Digital assets have mostly remained on the sidelines while US tech equities rebound following weeks of stagnation.