A robust cryptocurrency bull market is in the making, a Weiss Crypto Ratings analyst explained. Citing central banks’ “reckless money printing policies” and “the explosion in Defi innovation,” he sees long-term fundamentals favoring cryptocurrencies despite some short-term selloffs.
Robust Bull Market in the Making
Weiss Crypto Ratings’ Juan Villaverde explained last week that long-term fundamentals continue to favor cryptocurrency, despite some short-term selloffs. The analyst built the Technology and Adoption models that are at the core of the Weiss Crypto Ratings. He believes that two key factors will drive the next bull market: central banks’ “reckless” money printing and decentralized finance (Defi) innovation.
“The reckless money-printing policies currently pursued by most major central banks around the world is no doubt a long-term catalyst for crypto asset price appreciation,” he described. His sentiment was shared by Galaxy Digital CEO Mike Novogratz, who similarly believes that central banks’ mass money printing will drive the price of hard assets like bitcoin and gold. “We have a global money-printing orgy going on,” he previously said, adding that “Hard assets are going to be a big buy, gold and bitcoin are my two favorites.”
Another major factor that will drive the cryptocurrency bull market is Defi, Villaverde asserted. “One of the main drivers behind crypto bull markets is innovation,” he explained. “This was true in the first bull market, when Bitcoin was invented, and in the second major bull market, when Ethereum burst into the scene and enabled smart contracts and initial coin offerings.” Referring to Defi, the analyst affirmed, “We see the same enthusiasm now.”
The total value locked into Defi projects has recently grown by leaps and bounds. The value stands at $9.54 billion at the time of writing, according to Defi Pulse, a significant increase from the $7.88 billion level that news.Bitcoin.com reported in August. Currently, Uniswap is in the lead, followed by Maker, Aave, Curve, Synthetix, and Yearn.finance.
Villaverde emphasized that “the explosion in Defi innovation is also a catalyst for higher prices — in the short, medium and long term,” elaborating:
It’s against this fundamental backdrop — money-printing and Defi — that we can conclude what lies beyond this pullback is a run to higher prices for leading crypto assets. What we’ve seen so far is the new crypto bull starting to stretch its legs.
Although there were some short-term selloffs last week, Villaverde affirmed that they are in line with his model, which warned of a pullback between the second half of August and early September. Most cryptocurrencies are still trading well below the all-time highs established between December 2017 and January 2018, the analyst pointed out,” adding:
Looking beyond short-term gyrations, we continue to see a robust bull market in the making.
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Image Credits: Shutterstock, Pixabay, Wiki Commons, Defi Pulse
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Source : Bitcoin