Bitcoin and Ethereum May Have Found Their Market Bottoms

Key Insights

• A joint statement by the Federal Reserve, Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency outlined future regulatory policy while remaining in a heightened state of caution on Jan. 3, 2022.
• Technical analysis indicates Bitcoin is potentially near its market bottom, with Ethereum not far behind.
• Competition between Apple’s and Meta’s mixed-reality headsets could drive growth for Ethereum-based NFTs and virtual worlds in 2024.

Signals

U.S. federal agencies issued a joint statement highlighting the risks of digital assets for banking organizations with a tone of caution.

Last week, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency (“the agencies”) issued a joint statement on “crypto-asset risks to banking organizations.” The statement lists risks “associated with crypto-assets and crypto-asset sector participants that banking organizations should be aware of,” which could be used to characterize bad or irresponsible actors in 2022. Following this list, the agencies state, “it is important that risks related to the crypto-asset sector that cannot be mitigated or controlled do not migrate to the banking system.”