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<p>Investors are anticipating more flashes of bitcoin and other cryptos, as concerns over an aggressive Federal Reserve threaten to squelch market risk appetite.</p><p>The volatility that is typically associated with cryptocurrencies is at full display over the past few weeks. Bitcoin is the biggest cryptocurrency, has risen by nearly 33% as of Jan. 24. It was last traded at $43,850. This is a rebound from dropping that cut its price in half from November's record-setting high. https://atavi.com/share/vb1agoz1k24px , ether , has risen by around 40% since Jan. 24 at around $3,200 as of Jan. 24, following a 56 percent decline from its record-setting $4,868 at the time of the November.</p><p></p><iframe src="https://www.youtube.com/embed/OfVumcKtpG8" width="560" height="315" frameborder="0" allowfullscreen></iframe><p>While proponents of cryptocurrencies once denied their correlation to other assets bitcoin and other cryptocurrencies enjoyed huge gains over past two years. They've been rising alongside stocks as the Fed together with the other major central banks released unprecedented amounts of stimulus in the global economy. Bitcoin is up 1,039 percentage since March 2020. Ethereum has increased by 2,940%, but the rallies in both cryptocurrencies have been disrupted by stomach-churning selling.</p><p></p><p>Their recent volatility has occurred in the midst of a wider market selloff that was triggered by investors shifting their portfolios around to account for an even more aggressive Fed, which is now anticipating to raise rates by 7 times this year to battles rising inflation. The index that is the benchmark S&P 500 index (.SPX) has dropped 5.5 percent in the year to date, while the technologically-oriented Nasdaq (.IXIC) lost 9.3%. dropped 9.3 percent..</p><p>The fear that an aggressive current tightening in the central banking system going forward will hamstring volatile assets has made difficult for traders to keep their optimistic outlook for bitcoin and cryptos this asset class is already known for its extreme volatility.</p><p></p><p>Rising tensions in Ukraine the country where Washington warned a Russian invasion could take place any day, could also lead to market shifts in the future Investors have said. Read more</p><p>Bitcoin could "really become the ultimate mover and so many risk factors that could lead to a 40% drop out of nowhere," said Ed Moya, senior analyst at Oanda.</p><p>Some analysts from trying to gauge the fair value of the currency, or even identify important prices.</p><p>Analysts at JPMorgan believe that bitcoin's fair value at about $38,000 , which is 15% less than its current price based upon its fluctuation in comparison to that of gold. https://cutt.ly/SPe4Vwu is an asset commonly used by investors to protect their portfolios from fluctuations in the economy and inflation.</p><p>Vanda Research, meanwhile, reported in a recent document that most of the negative bets on the weaker bitcoin were placed around $47,000, and "there could be an enormous short-squeeze , if the threshold is met and retail investors return to trading in crypto."</p><p>However, the correlations between Bitcoin and the S&P 500 climbed to an all time high on Jan 31according to figures collected by BofA Global Research, undercutting some of the arguments made by those hoping to make use of bitcoin as an insurance against market volatility.</p><img width="410" src="https://criptoeconomia.es/wp-content/uploads/2022/02/por-que-fluctua-el-bitcoin-1.jpg"><p>The next week, investors will receive minutes from the most recent Federal Reserve session on monetary policy that will be due out Wednesday. Walmart (WMT.N) and chipmaker Nvidia Corp (NVDA.O) will be among the companies reporting results, as corporate earnings season rolls on.</p><p>Some investors are making plans to take advantage of the volatility in bitcoin, assuming that the long-term benefits of blockchain technology, the built in supply limit, and the effect that it creates, will last even in the face of frequent price fluctuations.</p><p>Jurrien Timmer, director of macro-economics at Fidelity described the current speculation on cryptocurrency to volatile tech stocks that were experiencing during the dotcom era nearly two decades ago. This was a boom-and bust period in which there was just a handful of companies left standing.</p><p>"Amazon is still active and Apple is also around, and they're bigger than they've ever been and the assumption is that for bitcoin it will be the same," says the expert. "But bitcoin isn't immune to these waves of speculation or sentiment."</p><p>Bitcoin could hit 100,000 by 2023. Timmer claims, according to his supply/demand model.</p><p>Other experts believe that mature cryptocurrency, such as Bitcoin and Ether are unlikely to make the spectacular gains they have made since the time of their creation.</p><p>Instead, they are turning to the universe of new, alternative coins that are being created to benefit of the investment flowing into the crypto sector, including the metaverse and NFTs. The latter saw more than $30 billion of venture capital investment last year, as reported by PitchBook.</p><p>Certain altcoins include cosmos Terra Luna, and Polkadot with a drop of around 20.5% (38%), 20.5%, and 25.5 percentages year-todate, respectively, as per coinmarketcap.com.</p><p>The understanding of the risks that come with decentralized finance and the risk of them likely to be one of the major challenges for investors in 2022, according to Lily Francus, director of quantitative research strategy at Moody's Analytics.</p><p>Cryptocurrencies "are going to remain very volatile , but there are significant players on the institutional and retail side who are growing, so the interest continues to grow," said Oanda's Moya.</p>
