Bloomberg senior commodity strategist Mike McGlone has suggested that the recent 2022 market volatility highlights Bitcoin’s role in the ongoing digital assets revolution.
He suggested the significant entry and exit of capital from the two assets shows the extent of the expanding crypto dollar economy.
McGlone noted that advances in dollar transactions in the space are vital towards growth in the cryptocurrency sector.
“Some purging of crypto-asset excesses at the start of 2022 shows the underpinnings of the three stalwarts Bitcoin, Ethereum and the proliferation of crypto dollars. The nascent dollar transaction technology is a significant advancing part of the revolution in digital assets,” said McGlone.
His sentiments come as Bitcoin increasingly emerges as a possible store of value alongside a mode of payment with the potential to disrupt the global financial system.
However, the possibility of Bitcoin emerging as a central player in the financial system has been threatened by increased market volatility and a regulatory crackdown.
Notably, the cryptocurrency market volatility continues to escalate losing a significant share of capital led by Bitcoin.
Crypto market loses over $200 billion in hours
Over the last 24 hours, the total crypto market capitalization peaked at $2.043 trillion, but it had lost over $200 billion by the press time, correcting to $1.83 trillion.
Bitcoin has led the correction, trading at $39,000, a 7% decline in the last 24 hours.
At the moment, it is not easy to pinpoint the exact cause of the current crypto market bloodbath. However, the market is linking it to regulatory concerns from Russia.
The proposal comes after the bank finalized working on a paper expressing its vision for the role of crypto in the Russian financial system.
According to the bank, cryptocurrencies are volatile and are commonly deployed in criminal activities such as fraud and money laundering.
Worth mentioning is that the regulation aspect is set to dominate the crypto market in 2022, but some jurisdictions like India are proposing regulating the sector instead of a total ban.