“If so much capital is flowing into crypto, why is the bottom falling out of it?”

This is a question many readers are asking given the action in the cryptocurrency markets lately.

After all, I’ve written numerous times about how money is absolutely flooding into the crypto space…

  • Andreessen Horowitz raised $2.2 billion for a crypto fund… and then another $4.5 billion…

  • Paradigm raised $2.5 billion for its own fund…

  • 10T Holdings followed with plans to raise $500 million on top of the $750 million it’s already obtained…

  • And an Andreessen partner left the firm to create her own $900 million crypto fund…

And these examples are just from the last few months.

With so much money heading into the space, we’d expect prices to soar.

Yet since the start of the year, bitcoin (BTC) is down around 15%… and ether (ETH) has tumbled 30%. In line with these drops, the stock of crypto exchange Coinbase (COIN) has fallen 38% in 2022.

So it’s no surprise some investors are wondering what is going on.

That’s why today, I’ll explain how we should think about the recent pullback… and share about an exciting new way we can profit in the crypto arena…

Taking a Breather

As usual, context is very important in a situation like this.

Keep in mind that bitcoin experienced an unbelievable run from October 2020 (when it was trading around $10,000) to early November 2021 (when it hit about $68,000).

That’s a 520% gain in just over a year… Most stocks don’t do that in two decades.

So it’s not surprising to see it take a breather. Even where bitcoin is trading today, it is still up about 270% since October 2020.

And much of the recent volatility we’ve seen in the cryptocurrency market was tied to concerns about the U.S. Federal Reserve hiking interest rates. Speculation abounds over how much – and how many times – rates will rise in 2022.

Whenever the Fed raises rates, it effectively makes money more costly. The higher rates ripple into the lending and credit markets.

For example, growth stocks, which often depend on debt to fund their growth, suddenly see their margins eaten away.

As a result, when money isn’t as “cheap,” riskier assets tend to sell off.

This is why interest rates matter to cryptocurrency. Many investors view crypto as a riskier asset.

Yet this is a near-term effect. For one, I anticipate that the recent guidance about raising interest rates three times or more this year is just posturing.

The planned 25 basis point increase this month will send a message… but I doubt we’ll see much else.

If we do see more rate hikes, it would only be another 25 basis points. Combined, that’s really nothing. Interest rates would still be well below 1%… which is pretty much the same as free money.

In other words, the markets are overreacting to something that won’t be a significant threat.

And once this sinks in, we’ll see a rebound in the assets that have been beaten down.

And that brings me to my next point…

Volatility Is Normal

In the cryptocurrency markets, volatile swings are fairly common.

The cryptocurrency market has witnessed nine pullbacks greater than 20% since it broke its previous all-time high in 2020. That’s a lot of action in a relatively short period.

All cryptos experience huge fluctuations in their value from day to day. But the market tends to rebound quickly – even after the biggest drawdowns.

In 2021, the entire market dropped over 50%.

Yet it only took about a month and a half for the cryptocurrency market to exceed its previous highs.

So this kind of price action is common in crypto… And as investors, we need to be prepared to deal with these daily fluctuations in value.

Even better, I believe we can use volatility to our advantage.

So I’ve been working on a secret project for the last several years to put a unique new strategy into motion…

It can help multiply our gains in the cryptocurrency space no matter what’s happening in the markets. In fact, it could help you make six figures within a 60-day window.

It’s all possible due to a patent-pending technology that spots a pattern in the crypto markets… over and over again.

And I’m hosting an event on Wednesday, March 16 at 8 p.m. ET, to unveil all the details. We’re calling this night Jeff Brown’s Secret Project Perceptron… and it’s going to be an exciting time.

I’ll even be giving away a free crypto recommendation to anyone who comes to this special event.

So if you haven’t already, please go right here to sign up to attend.

I can’t wait to share the results of my secret project with all my readers.

Regards,

Jeff Brown
Editor, The Bleeding Edge


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