Specializing in online trading and investment, Saxo Bank published a quarterly forecast for global markets, including the topic of crypto currency, which, in his opinion, could be on the threshold of a new cycle.
In the 35-page document Quarterly Outlook Q2 2018 released yesterday, Saxo Bank focuses on issues such as the approaching completion of the largest ever monetary experiment in the field of monetary policy, growing nationalism, ever more prominent social and economic disparities, and an ever-widening lack of hope among the younger generation.
In addition, bitcoin and other crypto-currencies became one of the areas that Saxo Bank analysts paid special attention to.
In particular, the document raises the question that crypto-currencies can enter a new cycle of their development. Thus, after an unprecedented rise to historical highs at the end of 2017, when the bitcoat price reached $ 20,000, in the first three months of 2018, digital currencies dropped significantly.
“Having lost more than 50% in value, bitcoin showed the worst for itself the first quarter and the second worst quarter in its history,” the report says.
According to Jacob Pauncey, the analyst at Saxo Bank, the situation continues to be fragile due to growing pressure from regulators and a ban on advertising in the largest social networks. However, “the possibility of renewal of growth” can not be ruled out, “he added.
Jacob Pouncey believes that in the short term there may be further downturns due to the same regulation and the continued sale of large batches of bitcoins by the trustees of the bankrupt Mt Gox stock exchange.
The analyst identifies several events that could potentially become a springboard for bullish sentiment in the market in the second quarter.
“If there is a significant pullback in the stock markets, there will be an influx of money into uncorrelated assets or assets that are outside the traditional financial system. And crypto-currencies become a potential alternative. The influx of institutional capital into the market of crypto-currencies due to greater regulation and better protection of investors can lead to a positive second quarter, “said Jacob Pauncey.
The growth in the last two years was due to the general geopolitical instability in the world, where the key events were the election of Donald Trump for the presidency of the United States, the referendum on the withdrawal of Britain from the European Union (Brexit) and nuclear tests in North Korea.
And according to Jacob Pouncey, the current negative cycle will also come to an end sooner or later. Weak investors will leave the market, and those who remain will be waiting for further positive news.