As per the increase in Covid Omicron variant cases in U.S. are responsible increasing fall in cryptocurrency prices in December as per investors. Where Ethereum had gone up by above of 400% in 2021 but was steady as March 2020 turned out to be the worst month cause of increased risk of assets was predicted by the investors due to the coming up of Omicron variant.
Bitcoin on the other hand was at pace to double S&P 500 and ripple to above 200% hike but at the same time they went down by double by this month. As per Brain Kelly, CEO and founder of the digital currency investment firm BKCM had mentioned that as Omicron is coming up at fast rate and U.S. economy halting a bit, also enough of macro funds which tend to use Bitcoin as pro-cyclical inflation hedge have thought to bring profits the entire December.
Further in current crypto drop, ESG (Environmental, Social and Governance) investments and concern for energy contributed in major crypto drop as per Lou Kerner (partner at Blockchain coinvestors).
Role Of Proof Of Work
Proof -Of – Work from cryptocurrency mining machines is taken negatively by majority investment community due to the energy consumed by them, as per Kerner. But according to him, if went deeply, majority of energy is that portion of energy which can’t be used anywhere else. Energy would not be of more concern coming year, when compared with the huge value attained from it at present.
Those assets which are involved with mining of cryptocurrency, had gone down than the assets themselves in December. Going in detail, MicroStrategy is going down by 21%, RiotBlockchain by 38%, Marathon Digital by 31%. Both coins and stocks are in close relation with investors mind, but is seen changed according to Kerner. Also he mentioned about the investors, that most of them are involved with mining in their minds and as it is small portion of market, so there are not many institutional investors involved fully with the same. ‘It’s easier for them to just look at it like a basket’, as per Kerner.
Kelly mentioned that he is having bullseye on Bitcoin and have belief that it would hit $100,000 by the end of 2022 but coming up of metaverse was attracting interest of investors. Further he also said that many other coins are seen in metaverse, decentralised finance or gaming performing very good. Kelly also discussed about the venture capitalists, new money and funds as Kelly’s were based on early growth prospects.
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