As the digital assets and currency sector continue to remain volatile, it its believed that this is largely due to the impact of the inflation witnessed by the US. “The cryptocurrency market will remain volatile and will continue to fluctuate due to the US inflation which advanced to a 40-year high in September. Inflation is at its lowest level in seven months and its rate is still strong and is at a 40-year high, nevertheless,” Gaurav Mehta, CEO, Catax, a crypto and blockchain audit platform, told FE Blockchain.
However, at the time of writing this news on October 14, 2022, Bitcoin was down 1.07%, trading at $19,649.00. This cryptocurrency now has a $363.73 billion market cap. The cryptocurrency’s weekly fall is about six percent as a result of the most recent Bitcoin selloff. According to Raj Kapoor, founder and CEO, India Blockchain Alliance, cryptocurrency value fell precipitously throughout 2022 due to scams such as Ponzi schemes, and extreme market instability.
Source: TradinView
The collapse of Terra’s LUNA and Celsius Network, Three Arrows Capital’s (3AC) misuse of leverage and client funds, and Terra’s implosion have resulted in sequential drops in asset prices in the cryptocurrency market.
Source: Chainalysis
A report by Vetle Lunde analysts at Arcane Research, a Norwegian investment company, revealed that in terms of long-term outlook Bitcoin (BTC) is on track with previous bear market trajectories. Hence, market has fallen over 70% from its all-time high (ATH) in November. According to Sharat Chandra, co-founder, India blockchain forum, once the federal reserve system (FED) has reached an appropriate restrictive interest rate level and inflation shows clear signs of slowing, cryptocurrency may again find room to see a substantial recovery.
Moreover, experts believe that inflation begins to taper as the health of the economy improves, or as the Federal reserve begins to signal a pivot in its current monetary policy. “Risky assets such as Bitcoin and Altcoins could again be the canaries in the coal mine,” Mehta added.
Also Read: Tether reduces commercial paper reserves for USDT to zero
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