March 6, 2023 – March has not been easy so far, with the crypto market still processing Silvergate’s demise, while it expects to take something from a couple of speeches the Fed Governor Jerome Powell will give this week. As US inflation concerns are still on the rise, the expectations of a 50 bps rate hike on March 22 have increased. For now, Bitcoin and Ethereum prices are stable with low liquidity, reflecting the bulls and bears divisive view of the upcoming price action, in our view. Meanwhile, the fear, uncertainty and doubt (FUD) season is at all-time-high.
Santiment, an analytics firm, which measures, among other things, the crypto market sentiment on social media, said that the past weekend reached one of the highest levels of FUD. According to them, the surge in bearish sentiment was predominantly from Twitter. However, the mainstream media is contributing with its share of negativity. The Wall Street Journal alleged that Tether accessed the global banking system through fraudulent documents and shell companies. The Journal is also reporting that internal documents and employee messages revealed that Binance and Binance US would not be completely separate entities. It is reported that Binance created its US platform as a shield from regulators. Both Tether and Binance denied wrongdoings. We view the current wave of FUD related to the crypto industry as an expected manifestation of the final stages of the crypto winter.
Despite the FUD dominating the headlines, there are some indications that the industry is in business as usual mode. Some traditional companies which have recently started to gain crypto exposure remain building as reported by the popular crypto analyst Lark Davis. Names like Blackrock, Mastercard, Meta, Amazon and Microsoft have continued to develop their crypto projects during the bear market and amidst all the FUD. On top of that, centralized crypto exchanges are receiving an increasing inflow of stablecoins, which may indicate that buying pressure is about to surge. We believe that in times like this it is easy to be overwhelmed by the negative newsflow, but the real development and crypto adoption will continue to move forward.
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Therefore, we built a governance level in the crypto market only compared with that of traditional financial institutions.