These indicators may favor Bitcoin and Ethereum despite a rocky start to 2022
The entire cryptocurrency market is off to a rocky start in 2022. Bitcoin notched a three-month low as global markets continued their New Year sell-off due to different factors. Ethereum fared even worse to start 2022, down nearly 18% following hawkish Federal Reserve meeting minutes.
<p lang=«en» dir=«ltr» xml:lang=«en»>The Buck, #Bitcoin & #Ethereum — Bloomberg's #Crypto Outlook, February 2022https://t.co/F2JcGQGcGl— Mike McGlone (@mikemcglone11) February 3, 2022
Mike McGlone, Bloomberg’s senior commodity strategist published a report to highlight bullish scenarios concerning two cryptos despite the big bear. He outlined a few factors that could supplement BTC and ETH to their bullish trajectory.
According to the executive, top cryptocurrencies could have a relative advantage over other investment classes. Here’s why:
“Crypto assets may have a lot going for them as US midterm elections approach, notably versus inflation-related commodities. Typical demand and supply elasticity, and crude prices buoyed by the risk of war in Ukraine, are strong catalysts to refresh oil’s enduring bear market. It’s the opposite for Bitcoin and Ethereum.”
The report noted that the supply elasticity was negative for the top two cryptos and prices dipped within bull markets. Furthermore, Inflation concerns put politicians under pressure to deliver, while plenty of potential U.S. commodity production was limited by regulation. McGlone opined:
“We expect U.S. policymakers will embrace cryptos with proper regulation and ETFs for these reasons: dollar dominance, jobs, votes, lots of revenue (tax) and — most importantly — it’ll run counter to China’s antipathy.”
The report cited ‘Crude oil’ as the most significant commodity. However, ‘the rules of
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