The crypto market recorded a bullish Monday as the biggest digital assets printed green indexes all around. Bitcoin (BTC) is strongly holding the $52,000 price level and aiming for the $53,000 mark next. However, market experts have warned of Triple Bubbles in Bitcoin, FAANGs, and AI Crypto, while retail investors are tentatively returning to the market.
Can Bitcoin defy burst sentiments?
Jesse Cohen, Global markets analyst in a post warned the Federal Reserve facing a trifecta of stock market bubbles. This includes Bitcoin, FAANGs (Facebook, Apple, Amazon, Netflix, Google), and AI linked stocks. Cohen highlights potential risks in BTC, NVDA, and TSLA, emphasizing the certainty of bubbles bursting.
Another market expert, Tedtalksmacro, questioned the utility of AI crypto and gaming tokens. He showed skepticism about their real-world value. Concerns arise over the models leading to infinite token selling, referencing previous cycles like Axie. Despite potential pumps, Tedtalksmacro cautions against becoming a token bagholder.
These warnings come in when retail investors are reportedly re-entering the crypto market showing signs of recovery. Coinbase reports a 60% year on year (YoY) jump in net consumer transaction revenue in Q4 and an 80% surge from Q3.
According to the report, Robinhood notes a 242% YoY surge in crypto notional volumes in December. This signals a return of mom-and-pop traders. These are the investors who are described as less experienced investors in the market.
Bitcoin price is up by 27% in the last 30 days. BTC is trading at an average price of $52,316, at the press time.
It is important to note that the launch of US ETFs investing in Bitcoin in January has fueled retail interest. This has eventually caused a surge in Bitcoin’s price. However, Google Trends indicates a decline in web searches for “Bitcoin” after the initial spike in January, suggesting cautious retail engagement.
Investors coming back to market?
However, the report suggests that the Crypto exchange app downloads remain below peak levels. Binance and Coinbase are reporting figures well below their 2021 peaks. While Binance’s app downloads increased to 10 million in Q4, Coinbase saw a 13% sequential jump.
Despite the increase, both exchanges’ app downloads remain below their bull-market highs. Coinbase’s consumer trading volume is only 16% of the last peak, indicating potential for further growth as funds return from bankrupt entities like FTX.
Investors anticipate a rally following Bitcoin’s halving, a software upgrade expected in April. The halving will cut rewards to network-supporting computers in half. Bitcoin, currently trading around $50,000, shows positive momentum drivers, according to Coinbase CFO Alesia Haas. The halving historically results in increased retail engagement and growth.
