The current crypto winter, according to Kathleen Breitman, co-founder of the Tezos network, “is going to get worse.” She pointed out that the sector needs to adjust to a world with rising interest rates.
The sector expert blamed venture companies for the bear market in remarks to CNBC on November 2.
Breitman stated that some of the companies’ values increased as a result of the easy money coming into the system. She gave the example of OpenSea. Trading volume on the market fell 88% between September 2021 and September 2022.
The comments shed light on the claim that participants in the industry were mostly focused on the overinflated valuations of crypto companies instead of the actual asset value.
The popularity of Tezos (XTZ) has drastically decreased among cryptocurrency traders and investors. The once-hyped proof-of-stake asset is today ranked 46th with a market worth of $1.2 billion, down 84.5% from its all-time high.
According to Breitman, rising interest rates will likely lengthen the crypto winter and make cash more alluring.
Binance CEO Changpeng “CZ” Zhao discussed the crypto winter at the Lisbon Web Summit as well. Cryptocurrency, according to the ever-optimistic crypto billionaire, is likely the “only stable thing in this very dynamic environment.”
He also made remarks about the relationship between tech equities and the market’s response to Fed rate hikes. He noted:
“When the Fed raises interest rates and the stock market crashes, they want more cash, so they sell crypto. This is because the user base is still very highly correlated.”
Glassnode Draws Parallels between Existing Crypto Winter with Previous Ones
In other news, on-chain analytics company Glassnode made some comparisons with prior crypto winters and bear markets earlier this week.
#Bitcoin has rallied back above the key $20k psychological level after many months of low volatility.
In this edition, we analyze how Bitcoin may be hammering out a near-textbook bear market floor and what risks may lay on the road ahead.
According to the report, there were “textbook resemblances to prior cycle lows,” and Bitcoin was forging a bottom.
The only thing left after monetary losses have been sustained is a “component of time and investor apathy,” it continued.
The bear market in 2014–15 and the crypto winter in 2018–19 both occurred under the same circumstances. Given that this cycle has only been approaching its bottom for four months, it is likely to last until 2023, particularly if interest rates continue to rise.
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