Another week and another low for the crypto-markets. Today, Bitcoin prices have fallen dangerously low once again, touching the $18,300 territory. This is low that had not been seen since late 2020. It is apparent that an already pessimistic market is further in panic mode as it braces for the much-awaited 100 basis point interest rate hike this week. It appears unlikely for stability to return in the market before the US central bank drops the interest bomb.
Highlights of the week
- According to reports, the Indian finance ministry is currently examining potential frameworks through which GST application could work, in terms of cryptocurrency-based transactions. According to local media reports, the ministry is working closely with crypto-experts, and is aiming to attain a holistic view regarding digital currencies, and how best they can integrate into the national legal structure.
- The Japanese financial giant, Nomura Holdings, announced yesterday the formation of ‘Laser Digital Holdings’. The newly announced division would act as the group’s venture capital arm, focusing primarily on crypto-initiatives and businesses. This move comes following a series of crypto-related investments and initiatives Nomura undertook this year through which it realized significant profits.
- According to a recent study by Harris Poll, the majority of American cryptocurrency investors believe they possess the skills and technical capability required to become billionaires in the future. The poll, which asked Americans about their perceptions of billionaires, also found that Gen Z and millennials hold this opinion more favorably than other age groups, with older generations lagging behind.
- Yellow Card, the primary Africa-oriented crypto-exchange, recently announced the completion of its $40 million Series B investment round. Just over a year ago, the exchange announced the proceeds of its Series A round, which reeled in $15 million. These successful rounds of financing indicate the booming cryptocurrency opportunity that is present in the developing and dynamic markets of Africa.
- The Chinese Central Bank, which is presently conducting large-scale testing for a digital version of the Yuan, has just expanded its study area. The decision comes from a senior official from the country’s top monetary body, who also stated that the People’s Bank has been ramping up the pace towards digitization efforts and crypto implementation this year.
Crypto fear & greed index
It is by no means a simple task to quantify the emotive state of the larger market at any particular moment. This is especially true for the cryptocurrency market, where fundamentals cannot be easily seen.
The crypto fear and greed index acts as the optimal tool which fills this measurement gap. It objectively gauges the wider market by considering various factors and producing a score between 1 and 100. The indicator measures the degree to which the market as a whole is leaning toward either greed or fear.
The index presently stands at a figure of 20, which is dangerously low, and within the extreme fear zone. Sentiment has been falling hard since the 13th of September when it stood at 34. Although the present figure is still largely above the fateful lows of June, during which the index touched 10, there is no certainty as to when the trend will bottom. This extreme fear links primarily to the anticipation of an interest rate hike, which many think could be as high as 100 basis points. If this is indeed the case, existing bulls may be forced to liquidate, sending the index to an even more fearful low.
