(Kitco News) – The cryptocurrency market, and Bitcoin in particular, is still highly correlated with the stock markets and could potentially see a further break to the downside, according to Aaron Arnold and Austin Arnold brothers who co-founded and host the popular YouTube channel Altcoin Daily.
The Arnold brothers spoke with David Lin, Anchor for Kitco News at the Future Blockchain Summit in Dubai.
Bitcoin’s recent consolidation near the $19,000 to $20,000 support level is reminiscent of the bear market in 2018 when “Bitcoin was consolidating near $6,000 and eventually dropped by 50%,” said Aaron Arnold. “Now back then, from my memory, a lot of people thought Bitcoin was the bottom.”
A few reasons that Bitcoin could fall lower include sustained inflation, which would prompt the U.S. Federal Reserve to maintain its hawkish stance, a replay of the 2008 financial crisis in the stock market, OPEC cutting production oil, which would mean higher oil prices, and an escalation of the Ukraine War to the point where Russian President Vladimir Putin wages war on the West, Aaron Arnold said.
Still, there are some macroeconomic forces that could present a bullish case for Bitcoin, especially in the medium to long-term.
“We’re seeing major bank intercommunicator SWIFT partner with Chainlink. We’re seeing Ethereum go through a successful Merge, Cardano following the Vasil hard fork, so we’re seeing the developers flock to these L1 protocols,” said Austin Arnold. “Obviously, the news in 2022 and 2023 is macro, but as the world trends more centralized, more permissioned, I think there’s a clear vision more than ever why we need a decentralized, censorship-resistant protocol.”
Aaron Arnold added that now, more than ever, society needs decentralized finance.
“The case for Bitcoin, the case for decentralized finance, open protocols, there’s never been a better case. The world is trending more digital, the world is becoming more centralized. There’s tons of people holding your money up. We can talk about Russia-Ukraine, the sanctions on Russia, several months ago, the Emergency Act in Canada with the truckers. Regardless of how you feel about that, and even on a smaller scale, everyday people in America and Canada, with Paypal…Payal censors your money all the time, there’s never a better case for open, more decentralized, more permissionless money like Bitcoin of financial products like decentralized finance,” he said.
For more information on the altcoins that don’t track Bitcoin and have the best investment potential, watch the video above.
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