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Omicron takes a bite out of bitcoin

By Fergus Halliday
 — 1 minute read

Omicron has taken the wind out of bitcoin’s sails, but crypto evangelists say the sector remains on track.

The discovery of a new COVID-19 variant has put an end to bitcoin’s latest surge, but experts don’t expect it to affect long-term price growth.

Despite recent short-term losses, deVere CEO Nigel Green described the move as a knee-jerk reaction by the market.

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“It will move on from this relatively quickly as it did with the Delta variant in the summer,” he predicted.

While the crypto sector often plays by its own rules, Mr Green noted that cryptocurrencies largely mirrored the reaction of traditional markets when it came to this most recent financial shock.

“This underscores how mainstream digital assets have now become, as an increasing number of institutional investors have piled into bitcoin this year,” he said.

However, that mainstream adoption can be a double-edged sword. When investors look to reduce exposure to most on-risk assets, Mr Green said that bitcoin typically gets the same treatment.

“In turn, due to bitcoin’s mammoth market share, it weighs down the entire crypto sector,” he explained.

That being said, Mr Green doesn’t think that these losses will stick around for long. 

When fears over the Omicron variant subside, he suspects investors will once again turn towards the rising level of inflation in the global economy.

Noting that more and more investors are seeking to use cryptocurrencies like bitcoin as a hedge against such market forces, Mr Green suggested that a return to growth would happen soon rather than later.

“This ‘inflation shield’ will continue to bring to the crypto market growing investment from major institutional investors, bringing with them capital, expertise and reputational pull – and further driving up prices.”

Mr Green said this latest dip for the crypto sector is little more than a speedbump, and one that would be used by savvy investors to top up their portfolios at a lower entry point.

Reminding investors that markets rarely move in a straight line, Mr Green added that he expects the value of major cryptocurrencies to continue to climb in the coming months.

“Bitcoin is unstoppable, and I fully expect to see prices double over the next 12 months,” he said.

 

Omicron takes a bite out of bitcoin

Omicron has taken the wind out of bitcoin’s sails, but crypto evangelists say the sector remains on track.

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