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Powell’s remark boosts crypto mart; what should be your approach now?

New Delhi: The crypto market is rejuvenated after US Federal Reserve Chairman Jerome Powell said the US has no plans to ban Bitcoin and cryptocurrencies.The crypto market had turned volatile in recent times, after China extended its crackdown and imposed a blanket ban on trading and mining of cryptocurrencies.The crypto community welcomed Powell’s comment, which came as a big sigh of relief for the industry. They expect the development by the world’s largest economy will neutralise the impact of China’s negative decision.”Powell’s statement helped clear fear, uncertainty and doubt from the market, which boosted the confidence of retail investors,” said Hitesh Malviya, founder, itsblockchain.com.Siddharth Menon, COO, WazirX said in 2020, the US Commodity Futures Trading Commission had classified Bitcoin and Ethereum as commodities.”This comment by Jerome Powell is a very good sign for the crypto industry,” he said. “This is a beacon of hope and will encourage more institutions to participate in cryptos.”Following the news, crypto enthusiasts have turned bullish on the digital tokens and many of them have delivered a strong return in the past two days.Tokens like Axie Infinity, OMG Network, Qtum, Icon have gained between 50-100 per cent in the last one week. Top players like Binance Coin, Terra, Uniswap and Solana have gained as much as 35 per cent during this period.Sharan Nair, Chief Business Officer, CoinSwitch Kuber, said the regulators in the United States appear to be gradually validating cryptocurrencies.”That doesn’t imply it’ll become widely accepted immediately, but it’s good news for the entire crypto ecosystem,” he said.Other major tokens like Bitcoin, Ethereum, Polkadot, XRP and Chainlink too have posted double-digit gains for last one week.Malviya says the recent weakness in the crypto market was not due to China’s ban alone. “Investors have become more mature now, and they are reacting relatively less to China’s ban news,” he said.Menon said the Chinese ban will not have long-term impact on the Indian crypto ecosystem. “Countries are working towards crypto-positive regulations and institutions continue to be bullish on cryptos,” he said.Global regulators have been assessing and evaluating cryptocurrencies and their usage for some time now. Many of them are seeing value in the ecosystem and coming around to share the industry point of view.”A ban by any particular country may not have a long-lasting impact on the global digital asset industry, ” said Shivam Thakral, CEO, BuyUcoin. Crypto backers strongly believe as an asset, crypto is indestructible. However, the Evergrande situation in China remains a global concern from all capital markets worldwide, in the short term.Industry watchers say investors should have a long-term view on crypto investment to reap handsome returns. “A systematic investment plan (SIPs) in crypto assets is the proven strategy to create long-term and goal-specific wealth,” said Thakral.Cryptocurrency investors must expect volatility, said Nair of CoinSwitch. “It’s very common for the price of a cryptocurrency to fluctuate in a matter of days or weeks.”

Read more: economictimes.indiatimes.com

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