The expert analyzes the factors behind the weakness of the Bitcoin price and predicts a positive change

James Butterfill, head of research at CoinShares recently joined analyst Scott Melkar on the state of the cryptocurrency market. Butterfill explained that the accuracy of economic forecasts and how they match up with real data is critical. Currently, most macroeconomic data is falling below expectations, indicating that analysts are overly optimistic. This shows that the US macro economy is not as healthy as it is believed to be.

The Federal Reserve (FED) is part of this trend. While the FED is discussing one rate hike this year, the market expects two. Butterfill believes that market forecasting is more accurate. If the FED dot plot reverses over the summer and aligns closely with market expectations in September, this could significantly support Bitcoin.

At present, much of Bitcoin's initial price weakness and recent decline can be attributed to market frustration with the Fed's stance on tapering. Investors were disappointed by the Fed's indication of only one rate cut this year, but Butterfill expects that outlook to change throughout the year, which could benefit Bitcoin.

Butterfill explained that on the altcoin side, we're seeing high returns relative to the small size of these assets. For example, Cardano has $52 million in assets under management, but last week saw an outflow of $1 million. Given its size, this is very useful. According to him, this year, there was a significant interest in the altcoin market, with investors combining different cryptocurrencies.

“On the altcoin side of things, that's where you measure flows — well, relative revenue — because obviously in these altcoins, there's a lot less assets under management. So if you take something like Cardano, it's only $52 million under management, but last week it was about one Almost a million dollars in revenue has been seen. What I've seen this year is that people are fishing low in the altcoin market,” he said.