Bitcoin and Ethereum Halve from Peaks… Jefferies Executive Says “Not a Crypto Winter”

▲ Bitcoin Plunge / ChatGPT-generated image

Bitcoin (BTC) and Ethereum (ETH) have plunged to nearly half of their previous highs, spreading fear across the market. However, the rapid expansion of blockchain ecosystem infrastructure and the pace of regulatory establishment suggest that this is merely a technical correction rather than the beginning of a prolonged downturn.

Andrew Moss, Head of Digital Asset Research at Jefferies, stated in an interview with Yahoo Finance on February 11 (local time) that the current 50% decline from peak levels for Bitcoin and Ethereum should be viewed as a temporary correction rather than the onset of a crypto winter. Moss explained that a true downturn would involve not only falling prices but also a slowdown in development and doubts about the industry's viability. In contrast, he assessed that the blockchain industry currently demonstrates strong resilience.

The recent weakness in the cryptocurrency market is attributed more to its high correlation with risk assets such as the Nasdaq index than to its characteristics as digital gold. Moss noted that over the past two weeks, a growing risk-off sentiment has led investors to rotate funds from growth-oriented tech stocks into value stocks, putting downward pressure on cryptocurrencies. He described this as part of a broader asset market rotation rather than a reflection of fundamental flaws within the industry itself.

On-chain data indicates that the market may be in the process of establishing a bottom. Retail investors holding less than 1 BTC have engaged in dip-buying since mid-last week, while whale investors holding more than 1,000 BTC continue to maintain a net-selling stance. Spot Bitcoin ETFs have also recorded their largest outflows since launch, suggesting that the market remains in a consolidation phase with buying and selling forces in close contention.

Key catalysts for a future market rebound include the establishment of a comprehensive regulatory framework in the United States and increased participation from traditional financial institutions. Moss projected that the passage of legislation such as the U.S. crypto market structure bill (CLARITY) would accelerate institutional adoption. The recent launch of a stablecoin by Fidelity and the formation of consortia among major banks signal that blockchain technology is becoming embedded within core financial infrastructure.

Asset tokenization projects led by major institutions such as BlackRock, along with the increasing issuance of stablecoins, are expected to drive a paradigm shift that enhances network activity. As traditional financial assets flow onto blockchain networks, a structural transformation has begun that could increase value for token holders. With regulatory clarity and infrastructure maturity converging, the cryptocurrency market is anticipated to move beyond a simple price recovery and establish itself as a new standard in the financial industry.

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