Crypto market: Who will win the tug of war between bulls and bears?

livemint.com:

Even as the cryptocurrency market on Monday reclaimed the $1 trillion market cap over a dramatic fall in prices of late, there could be more pain ahead for investors in the short term, according to experts.

While millionaire investor Kevin O’Leary believes that the price of the world’s largest digital currency by market capitalization Bitcoin could quadruple once the Securities and Exchange Commission (SEC) frames regulations around the crypto sector, one of the world’s most famous short-sellers Andrew Left dubs digital assets as a solution in the search for problems and that the idea of decentralization was the stupidest thing ever.

Pains have only begun

O’Leary says a bottom is usually created when there is a catastrophic event like a large player going bankrupt or somebody is in deep trouble for buying crypto on over leverage and when such an event occurs, markets will bottom out.

“Until then, there is no bottom. Events like the collapse of companies like Voyager don’t matter. When a big catastrophic event happens, it is going to be really ugly," he said.

Over leverage still not shaken off

The venture capital investor and entrepreneur says overleverage in the crypto markets has still not been shaken off and investors can therefore expect more paid ahead.

“Since there are no regulations in place, we don’t know who will blow up when. However, a positive is that when damage hits, the damage is diversified in terms of multiple countries being involved and multiple entities being in the picture. But the downsides overweigh the positives," he said.

Institutional investors will bring stability

The investor said regulating the sector would bring in institutional investors to asset classes like NFTs, stablecoins, and cryptos