September 27, 2022

The financier called the reason for the fall in the capitalization of the crypto market

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Simon Dedik, co-founder and managing partner of the consulting blockchain investment company Moonrock Capital, spoke about the reasons for the fall in the capitalization of the cryptocurrency market. The specialist noted that the total supply of all virtual assets fell below the $1 trillion mark. He assured that experts will name the reason for the collapse of the industry – the words of Federal Reserve Chairman Jerome Powell on methods to combat rising inflation, uttered on August 26, 2022. He agrees with this opinion.

Dedik stressed that all the attention of the Federal Open Market Committee (FOMC) was aimed at bringing inflation down to the target level of 2%. According to the financier, the latest statements by the Fed representatives have prompted many traders to leave the market, not only traditional, but also cryptocurrency. Investors fear for their funds amid general economic instability. This caused a drop in interest, liquidity and the total supply of coins.

According to Dedik, the restoration of price stability will take some time. A sustained period of below-trend growth may be required to bring inflation down. While higher interest rates and soft labor market conditions will reduce this figure, they will also cause some inconvenience to households and small and medium-sized enterprises. Powell said that the Fed will continue to tighten monetary policy and that is what scared investors and traders.

Many analysts began to say that the cost of bitcoin, and then other cryptocurrencies, will begin to grow only after 2 years. The point is that this will happen after the next BTC halving.

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