Will This Crypto Winter Be Different? Top Analyst Explains
Analysis
Price Impact
HighThe analyst suggests the current crypto winter could be more severe due to crypto's deep interconnectedness with traditional financial systems, leading to potentially widespread systemic risk.
Trustworthiness
HighKen brown is the finance editor at the information, a reputable publication. his analysis is based on structural observations of the market's evolution and interconnectedness.
Price Direction
BearishThe analyst describes an ongoing 'bad sell-off' where speculative assets are down significantly. the intertwining with traditional finance means downturns could drive crypto prices lower more severely, and stablecoin runs could further destabilize the broader market.
Time Effect
LongThe analyst refers to this as 'a new kind of winter' and emphasizes how the sell-off will interact with the global financial system, suggesting a prolonged period of adjustment, regulatory scrutiny, and potential structural challenges for the market.
Original Article:
Article Content:
Cover image via upload.wikimedia.org Read U.TODAY on Google News Major weak points "A new kind of winter" Advertisement Ken Brown is the finance editor at The Information, recently opined that the current crypto winter could be more severe due to how interconnected crypto is with traditional finance. "Crypto is more intertwined with the traditional financial system than ever before," he said during a recent interview. Major weak points Crypto winter is a phrase that people have used "a bunch of times", particularly after the FTX collapse, Brown explains. HOT Stories Crypto Giant Upbit Discloses $37 Million Hack on Solana Network Ripple Accelerates RLUSD Mints on XRPL XRP Price Forms Golden Cross, Shiba Inu Makes 1.36 Trillion SHIB Comeback, Legendary Trader Brandt Reveals ‘Dead Cat’ on Bitcoin (BTC) Chart – Crypto News Digest Bitcoin (BTC) Prints Insane 36,380% Liquidation Imbalance "Right now, we're in another bad sell-off. Crypto's down a bunch. The most speculative stuff is down a lot…There was a boom and prices went up a lot, and now they're coming off." Advertisement During the previous bull market, a lot of crypto assets were bought and sold speculatively. Some companies, like Strategy (MicroStrategy), invested heavily in crypto and pushed prices up by buying more as prices rose. "By the structure of these things, as they go down, they drive crypto lower." Large-scale runs on stablecoins could destabilize the broader market. He notes that stablecoins are increasingly used in countries with unstable currencies, making them systemically significant Brown cites Silicon Valley Bank and Circle (issuer of the USDC stablecoin) as examples. Circle had billions of dollars at Silicon Valley Bank, which collapsed due to losses on its assets. "A new kind of winter" "This is really what I call a new kind of winter because it's so interlinked. There's a ton of crypto on the stock market. There are these stable coins, there are other products, and everyone's issuing these stable coins." "What I'm really looking at is how this sell-off, whether that ends now or keeps getting worse, interacts with the global financial system, the traditional financial system." "The regulators of this system are very worried about this and are looking really carefully. This is a test. Pay attention. This is going to tell us how crypto and the traditional financial system are going to react this time," he added.