After a painful drop where Bitcoin crashed below $30K and many other cryptocurrencies chased it down, GlobalBlock (TSXV:BLOK) sees light at the end of the tunnel – at least for now.
Marcus Sotiriou, Analyst for GlobalBlock, operating in the UK has distributed a comment on crypto markets sharing his perspective on money flow moving back into crypto.
“Yesterday, Federal Reserve Chairman Jerome Powell gave a speech to update on the Federal Reserves’ plans going forward. It is clear that for the next two meetings (in June and July) they plan to raise rates by 50 basis points at each meeting. Rate hikes for the following 3 meetings after these are unclear. The market believes there is a 4.5% chance of no more 50 basis point hikes after July and a 36% chance of 1 more 50 basis point hike after July, which aligns with my thesis. This is because I think inflation will start to inflect down in the months of August, September and October,” said Sotiriou.
He believes that forthcoming interest rate hikes after July are driving significant selling pressure but if the majority of the market is wrong and inflation inflects down sooner than they predict, then there should b a sustainable rally from Q4, as the Federal Reserve becomes less aggressive.
“Crypto fund business Coinshares show that digital-asset funds last week experienced their highest inflows over the past 6 months, reaching $274 million. This occurred during the collapse of the UST stablecoin, showing that high-net-worth individuals and accredited investors bought into market panic caused by Terra’s implosion and saw it as a buying opportunity,” said Sotiriou. “Bitcoin-focused funds received $299 million in inflows, which was the highest inflow out of all crypto funds. This was the highest weekly inflow for Bitcoin since the last week of October 2021.”
He added that non-Bitcoin funds performed poorly in the market sell-off, as some $26.7 million flowed out of funds managing ether (ETH), while vehicles focused on Solana (SOL) recorded $5 million of outflows.
“This shows that investors have flocked to safety of the largest digital asset, and de-risked with many altcoins,” Sotiriou stated.
GlobalBlock has recently experienced some challenges of its own as it has withdrawn its application with the UK Financial Conduct Authority (FCA) with the intent to reapply in the future. In lieu of that decision, the company has incorporated GlobalBlock Europe UAB in the European Union jurisdiction of Lithuania. GlobalBlock UK will remain registered under the FCA’s temporary regime in the UK until the 25th May 2022, during which time GlobalBlock will be registered as a VASP in Europe.