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UBS warned of "apocalyptic cryptozyme"

UBS warned of

The weakening of arguments in favor of bitcoin as a currency and inflation hedge against the background of tightening policies of the Federal Reserve indicates the potential onset of "cryptozyma". This was stated by analysts at UBS, writes Business Insider.

Experts warned that the current decline will play out "years" because of investors' rethinking of digital assets. In particular, they cited bitcoin's limited supply and high volatility as barriers to gaining "better money" status;

A key rate hike by the Fed would reinforce interest in the dollar and raise questions about the attractiveness of digital gold as a savings vehicle. Other factors mentioned include "flaws in its underlying technology," as well as regulatory overhauls that could slow the development of the industry.

The investment bank noted that the decentralized blockchain design makes the technology difficult to scale, as all participants must monitor and verify transactions. On the issue of regulation, analysts noted the need for increased oversight by authorities to protect consumers and financial stability.

"Stablecoin and DeFi projects seem almost certain to face pressure from authorities in the coming months," experts predicted. experts predicted.

UBS allowed that the current weakening to $34,000 from a record $69,000 in November bitcoin will not be limited. Cryptozyma may come to the market. The last time a prolonged period of depreciation in digital assets occurred in late 2017. Then bitcoin fell from $20,000 to $4,000 and below.

Analysts recalled that it was the Fed stimulus that played a key role in the market's rally starting in late 2020.

Recall, Bloomberg strategist predicted the rise in the price of bitcoin to $100,000 in 2022. He expressed confidence that digital gold would benefit from a 10%-20% correction in the stock market.

Earlier, investment firm Invesco allowed bitcoin to fall below $30,000 in 2022 as "the asset bubble deflates."

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