Cantor Fitzgerald: the fall of the crypto market does not mean the beginning of a new crypto zyme

Analysts at investment bank Cantor Fitzgerald believe that the current decline in the cryptocurrency market is not the beginning of a new crypto zombie. In a commentary for CNBC, analyst Brett Knoblauch noted that key factors — shorter down cycles, the US Federal Reserve’s discount rate cut, the absence of catastrophic events, and growing regulatory support — indicate that the market is in a normal correction phase.

He reminded that the cycle from peak to trough usually lasts about 364 days, and the market is currently only 85 days into this period. At the same time, there have already been several significant pullbacks of more than 30%. The decline in rates, unlike previous winters that began with interest rate hikes, also creates a favorable macro environment.

The key difference in this cycle is the absence of a «black swan» — an event like the FTX bankruptcy or the Mt. Gox hack. According to Knoblauch, the ecosystem has not yet experienced shocks of this magnitude, and thus a deep 75% drop, typical of past cycles, seems unlikely.

In addition, he emphasized the significant increase in support for cryptocurrencies from regulators not only in the United States but also in other jurisdictions. This, in his opinion, is evidence of the long-term stabilization of the market, even if the current period is indeed part of a downward cycle.

Thus, Cantor Fitzgerald believes that even if a crypto zombie occurs, its worst phase is probably over.