Renowned analyst Bluntz recently made a bold prediction about the future of Bitcoin which indicates that the flagship cryptocurrency would experience a large price drop . According to Bluntz Bitcoin’s valuation may temporarily recover from its recent fall before collapsing further .
Alternative Cryptocurrencies Expected to Follow Suit
The gloomy projections don’t stop at Bitcoin alone but extend to alternative cryptocurrencies which are known as altcoins . Nicholas Merton shares a similar sentiment and suggests that altcoins will face a similar fate to the leading cryptocurrency . Merton believes that the current conditions in the crypto industry are unfavorable for investment which will without doubt impact the prices of cryptocurrencies across the board .
Liquidity of Stablecoins and its Impact on Cryptocurrency Valuation
Merton’s negative outlook on the cryptocurrency market is closely tied to the liquidity factor particularly in the stablecoin market . He highlights the critical role of stablecoins in determining the valuation of cryptocurrencies . According to Merton when stablecoins are highly liquid and allow for easy conversion of cryptos into cash it has a significant impact on prices . He argues that the liquidity of the stablecoin market controls the overall cryptocurrency prices . The inverse is also true .
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