- Investors fear that the Federal Reserve may hike interest rates.
- Coinbase and Crypto.com also sponsored advertisements for a Super Bowl ad.
Billionaire crypto entrepreneur Sam Bankman-Fried believes that a crypto “autumn” rather than “winter” is upon us and that the Federal Reserve will continue to be a primary driver of digital asset markets in the months to come. The price of Bitcoin and other cryptocurrencies has fallen since reaching record highs in November.
Fed Policy Most Important Factor
A “crypto winter,” defined as a time in which cryptocurrency values fall and remain low for a year or more, has been predicted due to the steep declines and fewer trading volumes on exchanges. The 29-year-old, who has a net worth of $25 billion, believes that Fed policy is the most important factor in the current crypto market. Investors fear that the Federal Reserve may hike interest rates as it struggles to contain rising inflation.
Bankman-Fried said:
“To the extent that Fed policy remains one of the core drivers of market movements, I think we’re going to continue to see that pretty strong correlation over the next, probably, months.”
At a time when the Federal Reserve is gearing up to discontinue the support that promoted riskier investments in 2020 and 2021, cryptocurrency prices have plummeted alongside those of fast-growing but unproductive technological businesses. Economically sensitive trades like bank stocks and commodities have become increasingly popular with investors. It’s been a rough few months for the cryptocurrency market, with Bitcoin falling from close to $69,000 in November to trading at approximately $46,000 on Wednesday.
The exchange recently shelled out big bucks for a Super Bowl ad starring comedian Larry David as part of a marketing campaign. Coinbase and Crypto.com, two of the most popular exchanges in the cryptocurrency market, also sponsored advertisements.
