Mohamed El-Erian, a revered financial market analyst, agrees with the trader and analysts’ consensus that the biting Bitcoin and crypto winter could be behind us.
Analyst: The Bitcoin Winter is over
In an interview with CNBC, Mohamed admitted that the fall of Bitcoin and cryptocurrency markets caused damage that has since been absorbed.
However, in his assessment, the dump of asset prices was necessary since it flushed out “excesses”, creating a solid base for the market to move forward.
His confidence in Bitcoin, the world’s largest cryptocurrency, comes when the coin has been reversing recent losses, bouncing from around $18k registered in June to over $22.5k as of July 25, according to trackers.
This bounce coincides with general market apathy and trader apprehension primarily due to macro-economic factors. Despite the surge above $23k last week, most analysts are convinced that the rally will be short-lived and the coin likely plunge in the medium term. Their position is notably diverging from Mohamed’s preview, coming ahead of the highly anticipated U.S. FOMC meeting.
Based on previous statements made by the FED’s chair, Jerome Powell, and soaring inflation in the U.S., analysts expect the U.S. central bank to further raise rates by 75 basis points—with any other reading above this figure likely to rapidly unwind gains made by Bitcoin in recent days. The rate hike will be an intervention to curb current inflation that’s at levels seen last 40 years ago, rising 9.1 percent year on year.
Based on fundamental factors and BTC bulls’ failure to sustain gains above $23k, some traders and analysts are still pessimistic about the coin’s medium-term prospects. In their preview, Bitcoin and the broader crypto market are bearish despite gains posted in the second half of July 2022.
Fidelity Investments CEO is Bullish
In early June 2022, a few days before BTC slumped to 2022 lows, Abigail Johnson, the CEO of Fidelity Investments, while speaking at the Consensus 2022 held in Austin, U.S., expressed her confidence in Bitcoin, saying bear markets presented an opportunity for investors to double down.
The executive’s positive outlook is because of Bitcoin’s fundamentals which she described as “really strong”.