Meltem Demirors, the chief technique officer (CSO) of cryptocurrency funding agency CoinShares, is saying digital belongings have executed “exceptionally well” in 2021 even after retreating from their document highs.
Demirors says in a Yahoo Finance interview that one in every of the components driving the crypto market correction is the expectation that, primarily based on historical past, the bull run following the quadrennial Bitcoin (BTC) halving is over.
“What we see at the finish of this yr, particularly, is I believe we’ve three components.
Number one, crypto operates in cycles and sure narratives and one in every of the narratives is that we’ve these four-year cycles round the Bitcoin halving and we’re reaching the finish of 1 cycle.
So I believe there’s a bit little bit of self-fulfilling prophecy right here the place persons are in search of the identical sample to repeat.”
.@CoinSharesCo‘s @Melt_Dem on three crypto components: “We have these 4-year cycles around the bitcoin halving, and we’re reaching the end of one cycle… number two and number three are bitcoin has become highly financialized… so we’re seeing correlation with macro markets.” pic.twitter.com/rKovJnwRXc
— Yahoo Finance (@YahooFinance) December 20, 2021
The CoinShares CSO says that the rising correlation between cryptocurrencies and the legacy markets is leading to jitters evident in the latter impacting the former.
“But I believe quantity two and quantity three are: Bitcoin has turn into extremely financialized, the general crypto class is extra financialized.
So we’re seeing a correlation with macro markets and I believe the uncertainty we’re seeing in equities can be translating to crypto.”
Demirors additionally says that the crypto market correction might be pushed by traders reserving earnings.
“I believe the third piece is once more associated to positive aspects.
A variety of funds and traders which have seen important positive aspects of their portfolios this yr are probably trying to crystalize and lock in a few of these positive aspects, you realize, receives a commission these efficiency charges.
And so I believe we’re seeing some promoting into the energy of the finish of the yr as individuals look forward and rebalance their guide and rebalance their publicity going into the New Year.”
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