A popular cryptocurrency analyst, who posted video analytics on YouTube, surprised his followers. The veteran analyst told 2.1 million YouTube subscribers in his latest video that altcoin prices could crash. Here are the details…
“If this happens, altcoin prices will collapse”
The host of the popular YouTube channel Coin Bureau said that altcoin prices may collapse due to a development. The veteran analyst, known by the pseudonym Guy, cited the rise in interest rates as a result of the Fed’s actions. According to him, crypto-assets will have to face huge losses in value if US interest rates continue to rise.
The analyst says the Fed will accelerate sales of its holdings of US Treasuries and mortgage-backed securities. He warns his 2.1 million followers that collapse is imminent if this is combined with interest rate hikes. According to Guy, the Fed’s sales will have a profound effect on interest rates. The master said:
“Interest rates on U.S. Treasuries and mortgage-backed securities are determined by price, which results in higher interest rates at a lower price. The Fed will sell billions of dollars of these assets as the economy continues to slow. It is unclear whether there will be enough buyers in crypto to handle this shock. Therefore, it means that altcoin prices will collapse. It also means that interest rates can rise faster than investors can handle. We saw this when the FED started shrinking its balance sheet in 2018.
“Price crashes will begin on this date”
As we reported as Kriptokoin.com, the FED decided to shrink its balance sheet in 2018. On top of that, the S&P 500 had lost about 20% of its value from its then high of 2,940 points. According to the master analyst, this is likely to happen again. Also, this time the correlation between altcoin assets and the stock market is even greater. So in any crash, crypto will suffer much more.
According to Guy, if this happens again, it has the potential to cause up to 40% collapse in leading altcoin assets. The analyst also predicts a drop of up to 60% or even 80% for most medium and small altcoins. That is, he expects large altcoins to be less impacted compared to smaller ones. Additionally, Guy gives his subscribers a date for the collapse. Accordingly, the analyst claims that the aforementioned price collapse will occur in early 2023.
“Bitcoin will suffer less”
The Coin Bureau server says that Bitcoin (BTC) will experience the least impact on price relative to altcoins. Guy says that no matter how many crashes occur in altcoins, there will be far less losses for BTC. But despite that, he says the crash he expects will be bigger than most investors can handle. At the time of writing, Bitcoin is trading below the critical $20,000 support at $19,950.
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