Crypto prices is likely to slide another 30%, however the overall market is very healthy, Valkyrie Co-founder and CIO Steven McClurg told to CNBC’s Tanaya Macheel.
The comments were made during a dicussion on the latest ‘crypto winter’ on CNBC.
Nashville headquartered Valkyrie Investments is a leading financial services firm with a focus on digital assets. Valkyrie crossed $1 billion in assets under management (AUM) in Feb.
It has been a very painful year for investors and all risk assets. Leading the pack is Terra which collapsed in May wiping out over $40 billion in investors’ money.
Commenting on the the current bearishness of the market, Steven said:
“A few months ago we were talking about how … the actions of the FED probably cause all risk assets to go down and they actually have, and it doesn’t look like the FED is going to let up anytime soon. They have a mandate to continue to fight inflation, and inflation is extremely high Right now.”
Steven said that fed is going to further increase interest rates that will help the markets go down. “we expect of markets, go down even further,” Steven predicted.
According to him, the S&P will probably hit the three thousand range before it potentially bottoms. In regard to crypto assets, he believes all the crypto markets could go down.
He predicted the crypto market to slide another 30% from here, sending Ethereum down to $1,400 and Bitcoin around $22,000.
Bitcoin has already lost over 56% from its peak of $67,566. Similarly, Ethereum has also lost around 62% from its peak of $4,812.
“This is no different than any other period of time where the fed has tightened rates of all risk assets will suffer through the tightening,” Steven said.
Despite so much negative sentiment plaguing the crypto market, Steven is highly convinced on the long term prospects of the market.
“I think the crypto market is very healthy. I think bitcoin is also very healthy,” Steven said.
Steven continued, “Of those of us who have been in this market for a long period of time are used to prolong periods where bitcoin prices drop. It usually indicates at time of building and you know, bitcoin is very trck driven.”
In fact, he highlighted the opportunity to build portfolio when everyone is selling. “We seen a lot of people build during these periods of time.”
Steven said that the current trend of crypto market is not unusual.
“Rather that was 2013, 2018 or even now, .. the amount of pull back that we’ve seen in Bitcoin and other crypto assets isn’t unusual,” he said.
He said that the market has declined reently, but there is no panic as such.
“Even in the equity markets, you don’t see a lot of panic right now,” steven said. “Even though nasdaq is down 30%, S&P is down about 20% from the peak. you’re not seeing people panic like they typically do, and markets are down like this, which tells me that you know markets will continue to go down and that they were probably a little bit over inflate it anyway.”
So, when does he expect the market to reverse and start going up?
“Typically markets go flat during the summer and this summer’s going to be no different. There’s a reason for the old adage — ‘sell in May and go away’.“
“We expect that markets will just slowly melt throughout the summer and sometime probably in September or October is when we could see Markets are picking back up again,” Steven said.
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