Cantor Fitzgerald believes that the current slowdown in Bitcoin and crypto may be more of a temporary setback than the start of a prolonged crypto winter.
In a new interview on CNBC, analyst Brett Knoblauch says shorter drawdowns so far this cycle, Federal Reserve rate cuts, the lack of a major “black swan” event and growing regulatory support in the U.S. and abroad could be signs that more than half of any potential decline may already be over.
“I think if you look at previous types of cycles, the peak-to-trough length is about 364 days. We’re at 85 days, but I think there’s a lot of positive momentum that suggests this might not be a crypto winter. It might just be a pullback. We’ve already had 330% pullbacks in this cycle. We have the Fed cutting rates. The last two winters have started with the Fed raising rates we don’t have a real black swan event.”
According to the analyst, the lack of a catastrophic market event at the FTX level bodes well for the crypto in its current downturn.
“If you go back over the last two cycles, you had the Mount Gox hack, you had the FTX bankruptcy. We haven’t really had anything. I would say the explosion of the ecosystem so far has been this black swan event. And if you look at the peak-to-trough decline, I don’t think we’ll have a 75% drawdown, like what previous cycles have had. We have, I think, a ton of regulatory support.
People in the government are somewhat supportive of crypto, not only in the United States but around the world. So I think if it’s winter, probably more than half of the decline has occurred.
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