Giant Bitcoin Exchange Scared: We Are Entering a Bear Market!

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One of the world’s largest Bitcoin exchanges predicted in its recent research report that Bitcoin will enter a bear market this year. Crypto exchange operator Huobi expects Bitcoin to lose value this year as markets react to the US Federal Reserve’s refusal of asset purchases.

Huobi says Bitcoin price will depreciate this year

The contraction could cause a reduction in global liquidity (or money injected into the global economy) this year, Huobi’s research arm, the Huobi Research Institute, wrote in a report released Friday. Like many other high-risk assets, Bitcoin is often sensitive to changes in liquidity, the report said. As such, Huobi predicts that securities will face a “market of crypto prices” where they face prolonged price drops. Additionally, a potential rise in interest rates is expected to put additional pressure on the price of risky assets, including Bitcoin.

Huobi is traded in Hong Kong but is headquartered in Seychelles. It is one of the largest crypto trading platforms in the world, often processing more than $1 billion in daily trading volume. The report, titled “Global Blockchain Industry Overview and Trends 2020-2021 Annual Report,” was published in collaboration with the Singapore Blockchain Association. Bitcoin, the largest cryptocurrency by market cap, saw its price fluctuate wildly in 2021. It hit a record high at almost $69,000 in November, but has since weakened and dropped below $39,000 by Thursday evening.