An ongoing sale-off in the US stock markets coupled with the uncertainty over the global macroeconomic outlook, which have already resulted in a marked decline of the cryptocurrency market capitalization, could plunge bitcoin's value by a third to about $20,000, Aaron Chomsky, the head of the investment department of the ICB Fund, told Sputnik on Wednesday
MOSCOW (Pakistan Point News / Sputnik - 11th May, 2022) An ongoing sale-off in the US stock markets coupled with the uncertainty over the global macroeconomic outlook, which have already resulted in a marked decline of the cryptocurrency market capitalization, could plunge bitcoin's value by a third to about $20,000, Aaron Chomsky, the head of the investment department of the ICB Fund, told Sputnik on Wednesday.
On Tuesday, the price of bitcoin dropped by more than 12% to under $30,000 for the first time since July 21, 2021.
"The main cryptocurrency has lost some 12% and reached $30,000 level... The next target is even lower: bringing the price down to $20,000 per 'coin' seems quite realistic in the current situation," Chomsky said.
The expert explained that the price is dropping due to expectations of a tighter monetary policy in the US leading to a downturn in stock markets, another surge in COVID-19 cases in China, and grave concerns about the future of the European economy.
In particular, the Nasdaq Composite Index, one of the three major US stock indices which groups top technology Names such as Amazon, Apple, Netflix, and Google, lost almost 10% over three days of continuous sell-off on May 5-8, driving it to its lowest since November 2020. The tightening of the US monetary policy is believed to be having adverse effects on the profits of technology companies.
The current situation is not in favor of tech giants; therefore, the increase in prices of cryptocurrencies should not be expected as these are strongly dependent on the economy's technology segment, Chomsky concluded.
