The era of “crazy speculation” in the digital asset market will soon come to an end.
The cryptocurrency market will continue to fall as the US Federal Reserve raises interest rates.
JPMorgan explained that when interest rates rise, investors stop investing in “crazy ideas” because they prefer projects that bring real economic returns. It is possible to have attributed the significant growth of the crypto market in recent years to the stimulus measures of the Fed in connection with the pandemic, which provoked a decrease in bond yields. This has encouraged investors to invest in cryptocurrencies and other high-risk assets.
At the end of January, the price of bitcoin for the first time since July 2021 fell to $32.8 thousand. Then the total capitalization of the cryptocurrency market fell below $1.7 trillion.
As of February 17, the first cryptocurrency is trading at $42.2 thousand, and the digital asset market is valued at $2 trillion.