Quick take:

• Bobby Won has forecasted that the next 12 to 18 months in the crypto-markets will be challenging.
• He cites the US Fed increasing interest rates to tame inflation as the reason to expect more pain in the crypto markets.
• The Bitcoin and Crypto market will not be short, and we have to prepare for tough times.

CoinGecko’s Co-Founder, Bobby Ong, has forecasted that the next 12 to 18 months in the crypto markets will be challenging due to the US Federal Reserve increasing interest rates to tame inflation. Additionally, Bitcoin and crypto are now tied at the hip with traditional finance and will most likely suffer losses as stocks undergo a correction.

He said:

The Fed has no choice but to raise interest rates to tame inflation. Growth stocks valuation are highly sensitive to i/r and are being pummelled.

With institutions involvement, crypto is now highly correlated to TradFi and is being viewed like a tech stock / risk-on asset so it’s also taking a large beating. Many publicly-listed tech stocks have seen its market cap drop 75% in the past 6 months. Are we near the bottom?

Unfortunately, we are just at the start of the rate tightening cycle by the Feds. The Feds will have to continuously increase interest rates for the next few quarters to tame inflation and more pain is incoming. We told our team to expect the next 12-18 months to be challenging.

The War in Ukraine and Supply-Chain Issues Continue to Cause Inflation

According to Mr. Ong, the crypto market is highly volatile, as demonstrated by USTs depegging and LUNA losing a huge chunk of its market capitalization in the last two weeks. Furthermore, the crypto-wide market pullback is being catalyzed by a macro-driven bear market as the war in Ukraine, and supply-chain issues continue to cause persistent inflation.

The Bear Market Will Most Likely Not Be Short

Concerning the length of the ongoing crypto bear market, Mr. Ong believes that it will not be short, and CoinGecko had to ‘prepare for tough times, be careful with expenditure, focus on optimizing revenue, and build things that the community wants. Now is the time to roll our sleeves up and BUIDL for the next cycle.’

He also pointed out that CoinGecko will not carry out employee layoffs during the bear market highlighted in the below two tweets.

We have started seeing tech companies implementing hiring freeze. Some have even started to layoff staff and I will not be surprised to see more layoffs taking place in soon as runway challenges become evident in more firms. https://t.co/pVx4ZCeLqk

— Bobby Ong (@bobbyong) May 19, 2022

Time to Be Extremely Selective With Your Bitcoin and Crypto Buys

In his concluding remarks on the bear market, Mr. Ong recommended that the crypto community be highly selective with their Bitcoin and crypto purchases. He also pointed out that Bitmex’s Hayes had stated that he would be a Bitcoin buyer at $20k and Ethereum buyer at $1,300.