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p>Investors are expecting more exuberance in bitcoin and cryptocurrencies, as worries over the hawkishness of the Federal Reserve threaten to squelch risks across markets.The typical volatility associated with cryptocurrency is at full display in recent weeks. Bitcoin is the most popular cryptocurrency, has gained nearly 33% as of Jan. 24 and is currently trading at $43,850. The price has risen from dropping that cut its prices in half compared to November's record-setting peak. Its major rival, ether , is up about 45% since Jan. 24 and is trading at $3,200 in the wake of a near 56 percentage plunge from its previous record-setting $4,868 the same month in November.The advocates of cryptocurrency have previously touted their lack of correlation to other assets, bitcoin and its peers enjoyed huge gains over recent two years, gaining along with stocks while the Fed together with the other major central banks released enormous amounts of stimulus into the world economy. https://notes.io/UVRp is up 1,039 percent since March 2019, and Ethereum has seen a rise of 2940%, however the growth in both cryptos have been slowed by a series of stomach-churning selloffs.<img width="423" src="">The recent volatility in the market has been accompanied by a wider market decline triggered by investors recalibrating their portfolios to account for an increasingly aggressive Fed that is anticipating to raise rates by up to seven times in 2018 as it combats the escalating inflation. The most widely used S&P 500 index (.SPX) is down 5.5 percent so far this year, while the technologically-oriented Nasdaq (.IXIC) had lost 9.3%.<iframe src="https://www.youtube.com/embed/OfVumcKtpG8" width="560" height="315" frameborder="0" allowfullscreen></iframe>Insecurity that a rapid loosening and tightening cycles by central banks going into the future will harm the risky assets have made it difficult for traders to keep their optimistic view on bitcoin as well as other cryptos and other asset classes, which are already is characterized by high volatility.The escalating tensions in Ukraine, where Washington warned a Russian attack could start anytime, may create market turmoil according to investors. Find out moreBitcoin could "really become the most powerful trading platform and there are multiple risks that could result in a 40% decline out of nowhere," said Ed Moya Oanda's senior analyst. Oanda.The volatility of Bitcoin's currency hasn't stopped analysts from seeking to understand the currency's fair value or identify potential price points.Analysts at JPMorgan believe that bitcoin's fair value at about 38,000 dollars, about 15% below its current cost based on the volatility in comparison with that of gold. Gold is a second asset investors often use to protect their portfolios from price fluctuations and economic uncertainty.Vanda Research, meanwhile, stated in a recent report that the bulk of bearish bets placed on a weaker bitcoin value were put in at around $47,000, and "there may be a large short-squeeze in the event that the threshold is exceeded, and retail investors return to crypto-trading."Additionally, the correlations between bitcoin and the S&P 500 climbed to an all time high on Jan 31according to figures that came from BofA Global Research, undercutting the logic of those hoping that they can use the cryptocurrency to an investment to protect against market volatility.Investors next week can look forward to minutes of the Fed's last financial policy meeting due out Wednesday. Walmart (WMT.N) and chip maker Nvidia Corp (NVDA.O) will figure among those releasing resultsas the corporate earnings season kicks off.Certain investors are bracing themselves to take advantage of the volatility in bitcoin, hoping on the long-term viability that blockchain technologies offer, its built in supply limit, and the effect on networks it generates, will last despite the frequent price changes.Jurrien Timmer, director of macro-economics at Fidelity has compared the current speculation in cryptocurrencies to the market turmoil that tech stocks endured during the dotcom period more than two decades ago. This was a boom-and-bust period which saw the smallest number of companies remain."Amazon is still around , and Apple remains in business and they're bigger than ever and we're thinking that for bitcoin that will be exact," he said. "But it's not immune to those waves of speculation and sentiment."Bitcoin could hit $100,000 by 2023. Timmer has said, in accordance with his supply/demand models.Others believe that mature cryptocurrencies such as bitcoin and ether are unlikely for the kind of impressive gains that they have racked up since their inception.Instead, they're looking to the universe of new alternative coins being developed to make use of the cash flowing into the crypto world, including the metaverse and NFTs, which saw more than $30 billion of venture capital investment last year according to PitchBook?.Certain altcoins include cosmos Terra Luna, and Polkadot, which are down around 20.5% in the past three months, with 38% and 25.5 percent year-to-date, respectively as per coinmarketcap.com.Knowing the risks associated with them and decentralized finance is likely to be among the most significant challenges for investors by 2022, said Lily Francus, director of quantitative research strategy at Moody's Analytics.Cryptocurrencies "are likely to remain extremely uncertain in the future, yet there are significant players on the institutional side and the retail side who are growing, so the interest continues to grow," said Oanda's Moya.

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