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UBS Predicts Apocalyptic Crypto Winter, With Cryptocurrency Prices Set To Collapse

UBS, the Swiss banking powerhouse, has issued a warning that further price disasters are on the way. Prices are unlikely to recover for several years. A group of analysts led by James Malcolm also sent out a note to their clients. Cryptocurrency will lose its allure among investors in 2022, according to the note.

The key explanation given by UBS analysts was that interest rate hikes by the Federal Reserve would make cryptocurrencies less appealing. Bitcoin and other crypto-assets are seen by many investors as a good alternative store of wealth.

The value of cryptocurrency has been increased by stimulus checks.

The value of cryptocurrency is on rise by stimulus checks, according to UBS.
The research also identified the US government’s stimulus measures as a key driver driving up cryptocurrency prices in 2020 and 2021. If the US economy’s soaring inflation is to be under management, the Central Bank will have to raise interest rates. Investors may not hoard bitcoin as a hedge against rising costs if the central bank manages inflation.

This year, the Fed is likely to boost interest rates many times. The Federal Reserve, according to JPMorgan CEO Jamie Dimon. That’s, will have to hike interest rates more than four times this year.

Goldman Sachs holds a similar viewpoint, predicting that interest rates would be up four times this year. Jeremy Siegel, a finance professor at Wharton, believes that rising inflation would force the Fed to raise interest rates far more frequently than the market anticipates.

Investors are finally realizing that Bitcoin (BTC), with its extreme volatility, is not a smart investment or a way to protect asset values from eroding. They also said that the finite supply of cryptocurrency makes it inflexible as a currency. The researchers went on to say that due of its decentralized design, blockchain technology is difficult to scale.

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Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Crypto is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Crypto market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.