The cryptocurrency market’s “Fear and Greed Index” has fallen to single digits (7/100), and an extremely pessimistic atmosphere is spreading in the market.
Industry representatives and experts are assessing the pressure from Washington given signs that the market is bottoming out.
Scott Melker noted that Democrats in Washington have been hardening their rhetoric against the crypto industry. Melker criticized Sen. Warren’s letter to the Fed and Treasury Department asking them not to provide bailouts to crypto billionaires. According to Melker, this move is entirely aimed at strengthening the “anti-crypto army,” especially since such bailouts are not even on the table.
Melker called Minneapolis Fed President Kashkari’s statement that “cryptocurrencies are useless and stablecoins can’t compete with Venmo” as “willful ignorance or stupidity.”
Haseeb Qureshi, founder of Dragonfly Capital, pointed out that unlike individual fear in the market, the situation is different on the institutional side. Mr. Qureshi highlighted important points, including the recently announced new $650 million fundraising effort.
They claim that the $650 million they raised in their funds came from important institutions such as sovereign wealth funds, foundations, and hospitals that now see cryptocurrencies as a “permanent part of their future.”
Unlike past cycles, he argues that the days of all projects coming together are over. He says the market has become more “discriminatory.” Only projects with real use cases and solid foundations survive. He points out that while it was once said that “tokens never fail,” some teams have now given up and some projects are really starting to die.
He says the only way to fail in cryptocurrencies is to become a “forced seller” when the market hits bottom. He uses Howard Marks as an example to remind us that those who sell at rock bottom never recover.
*This is not investment advice.
