As crypto risks evolve over time, so do the opportunities for returns, creating a transforming landscape for digital alpha investing with reduced risks paving the way for institutional adoption, although the window for capacity-constrained smaller funds to outperform won't last forever.
The cryptocurrency market has experienced a notable downturn, with the total market capitalization falling by 10% and triggering significant liquidations on futures contracts, attributed to factors such as rising interest rates, inflation, delays in approving a Bitcoin exchange-traded fund (ETF), financial difficulties within the Digital Currency Group (DCG), regulatory tightening, and a strengthening US dollar.
Cryptocurrencies, including Bitcoin and Ethereum, experienced a rise in value as investors anticipated the Federal Reserve's annual meeting and Bitcoin attempted to reach $30,000.
Cryptocurrencies experienced a significant drop ahead of Federal Reserve Chair Jerome Powell's Jackson Hole Symposium speech, while the global crypto market capitalization decreased by 0.83% in the last day.
Bitcoin and other cryptocurrencies experience a decline as the Securities and Exchange Commission slows down the decision process for crypto exchange-traded funds.
Crypto funding in August appeared promising with a $819 million investment, but without two large funding rounds, it would have actually shown a decline from July and a significant decline from the same time last year, reflecting a continuing slowdown in the industry.
Big tech stocks and cryptocurrencies, including Bitcoin, may underperform in the coming years due to contracting market liquidity and the Federal Reserve's hawkish policies, according to crypto analyst Nicholas Merten.
Major cryptocurrencies declined as investors awaited regulatory developments, including the SEC's ruling on a Bitcoin ETF, while Coinbase revealed plans for international expansion and focus on obtaining licenses in key financial jurisdictions.
Major cryptocurrencies experienced a decline due to concerns over the potential selling pressure from FTX's bankruptcy, as the exchange seeks regulatory approval to liquidate $3.4 billion in crypto assets.
Institutional investors are less optimistic about cryptocurrency due to a strong dollar and regulatory concerns, leading to consecutive weeks of outflows totaling nearly $60 million, according to CoinShares.
Cryptocurrency prices are less influenced by macroeconomic factors compared to traditional financial assets, with key drivers being market confidence, adoption, technology, and liquidity conditions, while traditional assets are more affected by macroeconomic drivers such as interest rates and inflation, as well as government regulations and transparency requirements.
Cryptocurrency is a digital form of money that operates on blockchain technology, using cryptography and decentralized control to provide secure and transparent transactions, but the complex dynamics of the cryptocurrency ecosystem also come with risks and uncertainties.
The percentage of US adults who owned cryptocurrency remained stagnant at 10% in 2022 after doubling in the two previous years, suggesting "buyers' remorse" among crypto owners due to the market crash and negative headlines, according to a survey analyzed by researchers at the Federal Reserve Bank of Atlanta.
Bitcoin and other cryptocurrencies experienced a decline after the Federal Reserve decided not to raise interest rates, suggesting that significant gains may not be anticipated in the near future.
Summary: Financial advisors can help navigate the world of cryptocurrencies by dispelling common myths, such as the belief that cryptocurrencies are purely speculative, mainly used for illicit activity, and bad for the environment.
Cryptocurrency is seen as a solution to the lack of sustainability and investor confidence in the African fintech space, according to experts interviewed on the Hashing It Out podcast.
