The prices of Bitcoin and Ethereum recently hit their lowest levels in months, sparking concerns among investors. Despite the sharp declines, experts are maintaining a positive outlook for the future of these cryptocurrencies.
On Monday, August 5, 2024, global panic selling led to significant drops in the prices of Bitcoin and Ethereum. The market reaction was largely driven by fears that the United States might be heading into a recession.
However, Gabriel Rey, Chief Executive Officer (CEO) of Triv, believes that the long-term prospects for Bitcoin and Ethereum remain strong. “The outlook is still positive,” Rey told Bisnis.com on Tuesday, August 6, 2024. “We are still seeing stable daily registration numbers and transaction volumes.”
Rey pointed out that the current situation differs significantly from the bear market of 2022, which saw more severe declines. A bear market is characterized by a prolonged period of declining asset prices.
“The prospects are still good,” he continued. “Bitcoin ETFs are still showing positive inflows, as are Ethereum ETFs. This indicates that overall investor sentiment towards cryptocurrencies remains positive.”
Rey described the recent price drops as a normal correction within a bull market. He expressed optimism that by the fourth quarter of 2024, the cryptocurrency market would begin to recover, with Bitcoin potentially reaching prices between $60,000 and $80,000.
He attributed the recent declines to macroeconomic factors. “What the Bank of Japan did caused market panic, affecting not only cryptocurrencies but also U.S. stocks, local stocks, and even gold and real estate, as people feared a recession,” Rey explained.
Additionally, escalating tensions between Iran and Israel in the Middle East contributed to market instability. “People fear a large-scale war, which is why cryptocurrency prices have dropped,” Rey noted. “But it’s not just crypto; almost all investment instruments are experiencing this.”
On Monday, August 5, 2024, the global risk aversion efforts caused sharp declines in cryptocurrency prices. Bitcoin fell more than 16%, while Ethereum experienced its biggest drop since 2021. By 6:00 AM UTC, Bitcoin had plunged 15.42% to $51,441, according to CoinMarketCap. This added to a weekly decline of more than 26%, marking the worst drop since the collapse of the FTX exchange.
Ethereum lost over one-fifth of its value before slightly recovering to $2,265. Most major cryptocurrencies suffered losses.
Despite the sharp declines, the overall outlook for the cryptocurrency market remains optimistic. As Rey highlighted, investor sentiment continues to be positive, and the market is expected to recover in the coming months.