One of Coinbase’s top execs highlighted why BTC’s price fails to rise in 2022. In an analysis of crypto market movements, Coinbase’s Connor Dempsey said he is not optimistic.
According to him, in the short term, there is no possibility of large increases, but in the long term, yes.
Dempsey explained that BTC has risen over the past two years as a clear response to Covid-19-related stimulus measures.
“Central Banks responded to the COVID shock with interest rate cuts, money printing and stimulus,” he said.
As he pointed out, these easy money policies started a bull run in stocks and cryptocurrencies. However, they also caused strong inflation that has been exacerbated even more now.
“BTC, NASDAQ and S&P peaked at the end of 2021, when it became clear that inflation was not under control,” he pointed out.
Now, central banks have to undo these policies that boosted equities and cryptocurrencies:
“For cryptocurrencies it was a cycle correlated with tech stocks and was traded as risky assets,” he pointed out.
Also according to Dempsey, as long as there is pessimism about risky stocks, as there is now, BTC has no room for a rise.
That is, he believes that sideways trading without big rallies or big dips should remain in the coming months.
As such, the market should not expect to see BTC below $25K nor above $38K.
Dismissal of employees
In fact, this downtrend analysis would have motivated Coinbase to lay off employees. On May 17, the exchange announced reductions in hiring to meet business goals in times of bear market.
“Given current market conditions, we think it’s prudent to slow down hiring,” the company said.
But Coinbase said the move is “important to ensure you manage your business at this time.”