Suppose the Ethereum “Merge” happened a year ago instead of now – the result would have been completely different. The crypto would have shown strong growth, because Ethereum’s switch had been expected for a long time and many have been calling the planned software update a revolution in the blockchain. However, the current situation in the financial markets and in the global economy is putting such pressure on cryptocurrencies that even this long-awaited change is unlikely to trigger growth, Artyom Deyev, head of analytics at AMarkets, explained to Invest Foresight.
Investors seem to have finally lost faith in digital assets, because the more unstable the general situation, the more recession expectations, the more negative developments (ranging from geopolitical upheavals to the energy crisis in Europe and Asia and spiraling inflation), the fewer people are willing to invest in crypto. The instrument is too volatile, with no guarantees of growth. When investors are massively shifting to the dollar, T-bonds (US government securities) and cash, they are unlikely to start suddenly buying crypto, the expert emphasizes.
“Ethereum, as well as Bitcoin, and the crypto market as a whole fluctuate with the trends on American exchanges, where despondency now reigns after the Fed upped its rate. According to various forecasts, the stock market can recover in 18-36 months, but the bottom has not been reached yet. The moment the US admits to the onset of a recession (which has already happened, technically), we can start counting down the time for cryptocurrencies to grow back. According to statistics, after a stock market collapse (which has already happened, as the indices lost 20% this year), it takes up to three years to regain its former high. This trend is relevant for crypto as well. So we can only expect Ethereum and other cryptocurrencies to grow in the long run,” Artyom Deyev sums up.