Based on hiked interest rates and the ongoing Russia-Ukraine war, crypto whales have shown signs of caution, given that their transaction volumes have been dwindling.
On-chain insight provider Santiment explained:
“Bitcoin, Ethereum, & Tether have seen plummeting whale transactions, the lowest amount of combined $100k+ valued transactions in a year. This isn’t necessarily bearish, but reflective of large players awaiting further war & inflation developments.”
After the onset of Russia’s invasion of Ukraine on Feb.24, the crypto market nosedived, with Bitcoin hitting lows of $34K.
Even though the leading cryptocurrency has reclaimed the $40,000 area, uncertainty continues to rock the crypto market as the geopolitical turmoil between Russia and Ukraine ravages.
With inflation hitting a 40-year high in the United States at 7.9%, the Federal Reserve (Fed) has resorted to increasing interest rates. Therefore, to tame fast-rising prices, the Fed has raised interest rates, a scenario not seen since 2018.
As a result, these factors are making crypto whales adopt a wait-and-see approach.
In a recent Bloomberg interview, Galaxy Digital CEO Mike Novogratz opined that Bitcoin would struggle to make massive rallies in the current environment. He noted:
“I don’t think Bitcoin can rally aggressively until we get a pause. Bitcoin is a narrative story; it’s bringing people into the community. It’s hard to bring in new people when their house is on fire.”
Meanwhile, the Russia-Ukraine conflict might accelerate the issuance of central bank digital currencies (CBDCs), according to a former Bank of Japan (BOJ) executive Hiromi Yamaoka.
He opined that more countries might follow China’s footsteps because CBDCs will counter the dollar’s supremacy in the global financial system.
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