Bitcoin and Other Digital Assets Experience a Wider Market Sell-Off
Risk of Forced Selling Leads to Further Weakness
A recent report by investment bank Standard Chartered has highlighted the potential risks facing the digital asset market, particularly Bitcoin (BTC), as a result of a broader macro-driven sell-off. According to the report, the market downturn was triggered by Federal Reserve Chairman Jerome Powell’s hawkish press conference in mid-December.
Investors Face a Challenging Environment
The report notes that investors who took on Bitcoin exposure after the U.S. election in November are now "only breaking even." This includes exchange-traded fund (ETF) buyers and BTC acquirer MicroStrategy (MSTR). The risk of mark-to-market pain is building, according to Geoff Kendrick, head of digital assets research at Standard Chartered.
Potential for Further Decline
If Bitcoin were to break below the key $90,000 level, it could retrace 10% lower to the low $80,000s, the report suggests. This would likely be accompanied by a decline in other digital assets. However, the bank advises adding Bitcoin once the retracement is over.
A Glimmer of Hope
Despite the challenges, Standard Chartered still expects Bitcoin to hit $200,000 by the end of the year, driven by the resumption of institutional inflows under a new Trump administration.
FAQs
Q: What triggered the recent market downturn?
A: The market downturn was triggered by Federal Reserve Chairman Jerome Powell’s hawkish press conference in mid-December.
Q: How are investors affected?
A: Investors who took on Bitcoin exposure after the U.S. election in November are now "only breaking even," including ETF buyers and BTC acquirer MicroStrategy (MSTR).
Q: What is the risk facing the market?
A: The risk of mark-to-market pain is building, according to Geoff Kendrick, head of digital assets research at Standard Chartered.
Q: What is the bank’s advice?
A: The bank advises adding Bitcoin once the retracement is over.
Q: What is the expected price target for Bitcoin?
A: Standard Chartered still expects Bitcoin to hit $200,000 by the end of the year, driven by the resumption of institutional inflows under a new Trump administration.
