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Crypto investors’ sentiment has been further dampened by the Fed’s hawkish pivot. The Fed said last week that it expects inflation to rise 3.4% this year and sees two interest rate hikes in 2023, which is earlier than was expected. Since this reflects the central bank’s rising concerns over inflation, risky assets like cryptocurrencies will likely continue to face significant pressure.
Given this backdrop, we think it is wise to avoid cryptocurrency related stocks such as Coinbase Global, Inc. (COIN), Riot Blockchain, Inc. (RIOT), Marathon Digital Holdings, Inc. (MARA), and Bit Digital, Inc. (BTBT). They look significantly overvalued now and are expected to continue declining in the near term.
