Powell’s remark boosts the crypto market; what should be your approach now?

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New Delhi: The crypto market is rejuvenated after US Federal Reserve Chairman Jerome Powell said the United States has no plans to ban Bitcoin and cryptocurrencies.

The crypto market has become volatile in recent times, after China extended its crackdown and imposed a blanket ban on cryptocurrency trading and mining.

The crypto community praised Powell’s comment, which was a great relief to the industry. They expect the development of the world’s largest economy to neutralize the impact of China’s negative decision.

“Powell’s statement helped dispel fear, uncertainty and doubts from the market, which in turn boosted the confidence of retail investors,” said Hitesh Malviya, founder of itsblockchain.com.

Siddharth Menon, COO, WazirX said in 2020 the US Commodity Futures Trading Commission classified Bitcoin and Ethereum as commodities.

“This comment from Jerome Powell is a very good sign for the crypto industry,” he said. “It’s a silver lining and it will encourage more institutions to participate in cryptos.”

Following the news, crypto enthusiasts have become bullish on digital tokens and many of them have seen a solid comeback over the past two days.

Tokens like Axie Infinity, OMG Network, Qtum, Icon have gained between 50-100% in the last week. Top players like Binance Coin, Terra, Uniswap, and Solana have gained up to 35% during this period.

Sharan Nair, Chief Business Officer, CoinSwitch Kuber, said regulators in the United States appeared to be gradually validating cryptocurrencies.

“That doesn’t mean it will become widely accepted immediately, but it’s good news for the entire crypto ecosystem,” he said.

Other major tokens like Bitcoin, Ethereum, Polkadot, XRP, and Chainlink also posted double-digit gains over the past week.

Malviya says the recent weakness in the crypto market was not due to China’s ban alone. “Investors have become more mature now, and they react relatively less to the news of China’s ban,” he said.

Menon said the Chinese ban will not have a long-term impact on the Indian crypto ecosystem. “Countries are working on crypto-positive regulations and institutions continue to be bullish on cryptos,” he said.

Global regulators have been evaluating and evaluating cryptocurrencies and their use for quite some time. Many of them see value in the ecosystem and come to share the industry perspective.

“A ban by a particular country may not have a lasting impact on the global digital asset industry,” said Shivam Thakral, CEO of BuyUcoin.

Crypto supporters firmly believe that as an asset, crypto is indestructible. However, Evergrande’s situation in China remains a global concern for all financial markets around the world in the short term.

Industry watchers say investors should take a long-term view of crypto investing to reap good returns. “A systematic investment plan (SIP) in crypto assets is the proven strategy for building long-term, goal-specific wealth,” Thakral said.

Cryptocurrency investors should expect volatility, CoinSwitch’s Nair said. “It is very common for the price of a cryptocurrency to fluctuate in a matter of days or weeks.”

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