Spencer Hallarn, Head of the Markets Department at GSR, shared his opinion on the prospects of the cryptocurrency market. The bullish phase directly depends on macroeconomic factors and requires certain conditions. The top manager considers it necessary to reduce the hype around the field of artificial intelligence. The AI sector is now absorbing most of the free capital in the open market. This technological trend is displacing cryptocurrency from the focus of large investors. The next bullish rally is possible when the Federal Reserve cuts interest rates. Hallarn is confident in the growth of bitcoin first of all, and not the entire market. The rest of the cryptocurrencies need to implement the practical use cases promised over the years. Market activity is quite closely related to price and total market capitalization. Low indicators of both factors significantly reduce the total trading volume.

Clients of brokers and market makers are becoming more disciplined in a declining market. Investors are paying more attention to hedging and sound financial planning. Over-the-counter risk coverage structures attract increased attention from bidders. Asset diversification through tokenized products is becoming an important trend. Crypto exchanges are moving from trading only cryptocurrencies to a broader basket. The boundaries between digital assets and traditional stocks are gradually blurring. Tokenization should be considered as a challenge to traditional banking systems. The main opportunity is to fix the outdated financial infrastructure. Simply wrapping an asset in a token does not solve the fundamental problems of the industry. Technology companies are actively developing this promising area of financial services.

The Federal Reserve may tighten monetary policy in September this year. Experts expect such a decision against the background of consistently high inflation. Rising energy prices also affect the decisions of the American regulator. The previous reduction in interest rates took place back in December last year. Lisa Cook, a member of the Fed's Board of Governors, announced a possible rate hike. The excitement around artificial intelligence continues to grow steadily in the market. The volume of venture capital investments in this sector reached huge values last year. The financing of AI projects has more than doubled since 2000. The largest players in the sector have not yet conducted an initial public offering of shares. The listing of these companies will lead to a significant influx of liquidity into the sector. The cryptocurrency market may face additional capital outflows.

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The material has been prepared solely for informational purposes and does not constitute financial advice or recommendation.