With the “Fear and Greed Index” in the cryptocurrency markets falling to single digits (7/100), an atmosphere of extreme pessimism prevails in the market.
Industry representatives and experts are evaluating the pressures coming from Washington in light of signals that the market is bottoming out.
Scott Melker noted that Democrats in Washington have hardened their rhetoric towards the cryptocurrency industry. Melker criticized Senator Warren’s letter to the Fed and Treasury calling for no bailout packages for crypto billionaires. According to Melker, this move is entirely aimed at strengthening an “anti-crypto army,” especially since such a bailout isn’t even on the agenda.
Melker described Minneapolis Fed President Kashkari’s statements that “cryptocurrencies are useless and stablecoins can’t compete with Venmo” as “deliberate ignorance or stupidity.”
Haseeb Qureshi, founder of Dragonfly Capital, noted that unlike the individual fears in the market, the situation is different on the institutional side. Qureshi highlighted important points, including the recent announcement of a new $650 million fundraising effort.
They argue that the $650 million they raised for their own funds came from serious institutions such as sovereign wealth funds, foundations, and hospitals, which now see crypto as “a permanent part of the future.”
Unlike past cycles, he argues that the era where every project rose together is over. He says the market has become more “discriminatory”; only projects with real use cases and a solid foundation will survive. While it used to be said that “tokens don’t fail,” he notes that some teams are now giving up and some projects are truly starting to disappear.
He states that the only way to fail in cryptocurrencies is to become a “forced seller” when the market hits its bottom. He cites Howard Marks as an example, reminding us that those who sell at the bottom never recover.
*This is not investment advice.
Read the full article here