More Pain For Crypto Market Ahead! This is What Traders Can Expect

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The post More Pain For Crypto Market Ahead! This is What Traders Can Expect appeared first on Coinpedia – Fintech & Cryptocurreny News Media| Crypto Guide

The cryptocurrency market had one of its worst weekends, with volatility pushing the price of the largest cryptocurrency below $18,000. Volatility has rocked the broader market in 2022, with various concerns warning that there may be more volatility ahead.

Similarly, Jim Chanos, an investment manager, and well-known market participant expect more suffering ahead, as few had anticipated that interest rates will continue to rise. On Wednesday, June 15, Chanos discussed his views on interest rates on Bloomberg’s “Odd Lots” podcast.

“That’s the one thing that people are not prepared for still, is interest rates resetting meaningfully higher, because it hasn’t happened in most investors’ lifetimes. The idea that actually interest rates are not going to be 2% or 3% for the foreseeable future is going to be hard for a lot of investors to deal with.”

Who is at Fault?

Chanos is of the opinion that the Federal Reserve (Fed) is to blame for the current volatility, despite the fact that the Fed’s monetary policy was eased in late 2018. Low-cost or no-cost trading platforms also contributed to the speculation; with the development of Special Purpose Acquisition Companies (SPACs), which raised billions of dollars daily, the financial world achieved its peak bullishness.

He stated that he has been surprised by how much retail investors continue to desire to speculate since November. Cathie Wood received inflows for the majority of the first quarter, with some of them being record inflows.

New SPACs raised an average of $3 billion in cash every night for a few weeks. And that was the same as the savings rate in the United States. SPACs were thus grabbing the whole US savings rate for a little period, which struck him as the height of absurdity.

Furthermore, after being short on Coinbase (NASDAQ: COIN) since March of this year, Chanos is not overly enthusiastic on the cryptocurrency sector.