Saxo Bank, a fintech specialist focused on multi-asset trading and investment, today published its quarterly outlook for global markets, and questions whether cryptocurrencies are entering a new cycle.
In its 35-page Quarterly Outlook Q2 2018 report, Saxo Bank focuses on how we are nearing the end of the largest monetary policy experiment of all time. This combined with ascendant nationalism, staggering inequality, and a widespread loss of hope among the younger generation. In its Q1 report, the bank focused on bubbles within the financial markets; for Q2 it is alerting investors to the fact that we are nearing the ‘end of a cycle like no other.’[1]
One of the areas that are featured in its report is the cryptocurrency market and whether it’s entering a new cycle. After enjoying unprecedented highs toward the end of 2017 – with bitcoin within reach of $20,000 – digital currencies fell back to earth during the first three months of 2018. In the first quarter, bitcoin recorded its worst first quarter, dropping over 50 percent in value, making it its second-worst quarter of all time.
According to Jacob Pouncey, cryptocurrency analyst at Saxo Bank, the situation remains in a fragile state due to increased regulatory pressure and social media advertising bans. He added, though, that ‘we can’t rule out the possibility of a comeback.’[2][3]
In the short term, Pouncey is of the opinion that there will be further declines due to the possible increase in regulations and a continued sell-off of large units of cryptocurrency such as the bitcoin with the Mt. Gox trustee. Not only that, but steep losses has driven market consolidation, while the sector has seen acquisitions of cryptocurrency exchanges from major organisations. These
