Major well-known altcoins are in decline today. ETH has dropped below $3.1k before rising above $3.2k. Currently, the price of XRP is hovering around USD 0.75. The ADA dipped below USD 1.20 before rebounding a few points.
Among the cryptocurrencies that have gained more than 5 percent in value are ATOM, ONE, QNT, MANA, ZEC, FXS, OSMO, and JEWEL.
ATOM is the market leader, having increased by 20 percent in a single day and crossed the $43 barrier. The altcoin has increased by 44 percent in just one week.
Altcoins Major Correction On Horizon
In a depressing Medium post, former BitMEX CEO Arthur Hayes predicted that altcoins would plummet 90% from where they are currently trading.
Hayes also doubts that “diamond hands” will be able to avert a “catastrophic fall” in Bitcoin. Institutional investors, he believes, will not hesitate to liquidate their investments if market conditions change:
They aren’t loyal to Lord Satoshi since they don’t believe in him.
However, he expects Bitcoin and Ethereum, the two most well-known cryptocurrencies, to fall far less than alternative coins:
I believe if Bitcoin falls below $30k and Ether falls below $2k in the next three to six months, I will sell all of my shitcoins… These shitcoins might drop by 75 percent to 90 percent in a really risk-free crypto economy.
2022 – Tough Year For Cryptocurrency
Chris Grisanti, chief equity strategist at MAI Capital Management, said that 2022 will be a tougher year for crypto in a recent appearance on CNBC’s “The Exchange.“
Grisanti believes that the new asset class will almost certainly become a victim of its own success, with a number of nations stepping up their regulation efforts:
Regulations will be obtained from a variety of sources (from China, from Europe, here in the U.S.).
He claims that altcoins would be the hardest hit, but that Bitcoin and Ethereum, the two most prominent cryptocurrencies, will be immune to government action.
What is the role of the Federal Reserve System?
According to Hayes, The greatest barrier for the cryptocurrency industry is the US Federal Reserve growing more hawkish.
The Bitcoin price and the Fed’s balance sheet expansion have a favourable relationship. Now that the central bank is steadily lowering its bond purchases, the “money printer” storey is no longer relevant.
Central banks all around the world are now hell-bent on combating inflation, it has emerged as “Public Enemy No. 1”:
Hayes believes the Fed will abandon its harsh approach if the consumer price index (CPI) has fallen below two percent, which he feels is doubtful.
He also expects the Fed will change course if inflation is no longer a key concern ahead of the US elections in November 2022.