This year more than ever, the Federal Reserve has asserted its authority over the crypto market.
“What the Fed is forcing the markets to do is flush out all areas of froth,” iCapital Chief Investment Strategist Anastasia Amoroso said on Yahoo Finance Live, “I am not calling all areas of crypto froth, but in a market that continued to trend up there were structures upon structures and derivatives upon derivatives that built up on average coins. So it’s starting a flush out in very important parts of crypto. I think that is a good thing.”
The Fed has taken a toll on the crypto market as a whole, taking a stance on soaring inflation via recent interest rate hikes.
As consumers flock to safety, out of the crypto markets, Bitcoin fell below $22,000 earlier this week, along with the entire crypto market falling below $1 trillion. It was around $3 trillion during the winter of last year.
Major crypto exchanges are also being hit hard, with Coinbase, Crypto.com, and Blockfi announcing mass employee lay-offs, and other companies freezing hiring in response to turbulent market conditions
Morale surrounding whether Bitcoin will hit $1 million by the year 2030 is low, an idea that was championed earlier this year by numerous crypto figureheads.
“No,” 22V Research founder Dennis Debusschere told yahoo, “We are in an environment where the Fed is tightening financial conditions, and in a tighter financial conditions backdrop speculative assets like bitcoin are going to get hit.”
Debusschere added that bitcoin “has not done the job of hedging like it was advertised to do.”