Liquidity slowdown and consolidation acceleration
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Bitcoin is currently trading at a level roughly 45% below its all-time high reached in October of last year. The market is increasingly interpreting this correction as a reflection of macroeconomic changes and industrial structural maturation, rather than a short-term price fluctuation.
On the macro side, the U.S. Federal Reserve's (Fed) monetary policy stance is having an impact. In an investment strategy newsletter published on the 8th, economist and Bitcoin advocate Lyn Alden analyzed that the Fed has entered a phase of gradual monetary expansion, rather than rapid quantitative easing. He explained that the Fed is likely to expand its balance sheet at a rate similar to total bank assets or nominal GDP.
Alden assessed that this policy environment, rather than rapidly driving up asset prices as in the past, creates a situation where asset selection is strengthened under limited liquidity. This could dampen investor sentiment toward highly volatile and risky assets.
Within the industry, there are predictions that consolidation and restructuring will intensify. Tom Farley, CEO of cryptocurrency exchange Bullish, said in a CNBC interview on the 8th that large-scale consolidation is inevitable across the cryptocurrency industry. He predicted that the same consolidation trends experienced in traditional financial exchanges will repeat themselves in the cryptocurrency industry.
Parley pointed out that past overvalued corporate values have delayed integration. He explained that projects with small revenues and limited growth potential have maintained independence, expecting to maintain their previous level of corporate value, but this expectation is no longer sustainable. Consequently, he predicted that in the future, there will be an increase in the number of projects with weak business foundations being acquired or liquidated by large companies.
The market is also paying attention to the possibility that price adjustments could act as a catalyst for this industrial restructuring. In an environment of limited liquidity, there is a clear tendency for industries to restructure around large companies with strong capital and infrastructure.
Ultimately, the Bitcoin price decline is interpreted as a simultaneous reflection of changes in the monetary environment and the maturation of the cryptocurrency industry, rather than a simple market weakness. While short-term volatility may persist, the analysis that the industry structure could shift toward greater concentration and refinement in the medium to long term is gaining traction.
Reporter Jeong Ha-yeon yomwork8824@blockstreet.co.kr
