The cryptocurrency market is currently in the mid of an unprecedented bull run, with Bitcoin leading the charge. According to the Crypto Fear and Greed Index, sentiment towards BTC and the cryptocurrency market, in general, is at its peak in almost 16 months, hitting its highest score this year and reaching levels not seen since Bitcoin posted its all-time high in November 2021.
The Current Crypto Fear and Greed Score
Based on data sourced from Alternative.me, the index sits on a score of 68 on March 21 (as of writing). The numbers firmly place the consensus within the “Greed” territory. The figures are 8 points higher than the month before and 2 points more than the day prior. It’s also 12 points more compared to last week.
What the Crypto Fear and Greed is All About
The Crypto Fear and Greed Index quantifies the current “emotions and attitudes” toward Bitcoin and the cryptocurrency industry as a whole. It takes into account various elements, such as market volatility, trading volumes, and social media trends, to give investors an idea of how the market is “feeling” at any given time.
The index uses a simple metering system that ranges from 0 to 100. The number 0 indicates that the market is experiencing an extreme level of fear. In contrast, 100 denotes “extreme greed.”
The figure right now indicates that the market is treading on the “Greed” zone. This means that investors are exhibiting an increased appetite for risk and are optimistic about the future of cryptocurrencies, particularly Bitcoin.
Factors Contributing to the High Greed Score
The failure of Silicon Valley Bank, as well as other challenges faced by traditional banks, are directly contributing to this view. All these are causing a loss of faith in financial systems that are still following the conventional format. Likewise, the resulting unpopular monetary policies tailored to address the current banking woes, such as quantitative easing or currency devaluation, are triggering the same effects.
This kind of frustration can prompt investors to seek alternative investment opportunities, particularly cryptocurrencies, where they can preserve or even expand their wealth over time. Over the years, cryptocurrencies have surpassed the popularity of gold as a hedge against economic uncertainty or as a way to preserve wealth because of their better accessibility, lower transaction fees, and ease of exchange.
Of course, the crypto bull run itself is another major catalyst for the higher greed score as more people are jumping onto the bandwagon to capitalize on the event. This is mostly the time when FOMO or the “Fear of Missing Out” can kick in, which creates a sense of urgency and excitement among investors.
When people see the cryptocurrency market surging, they may feel that they are missing out on a valuable opportunity to make money. This can lead to a rush of investors buying into the market, driving up prices even further and contributing to an overall sense of optimism and greed.
Present State of Bitcoin
According to investment firm Goldman Sachs, Bitcoin has been the top-performing asset this year, gaining 51% in year-to-date returns. The asset management firm stated in its March 17 report that Bitcoin’s overall returns year-to-date had surpassed those of information technology, gold, the NASDAQ 100, and the S&P 500, among other forms of investment instruments.
Since the collapse of Silicon Valley Bank and the resulting fallout in the traditional financial system, sentiments around BTC and crypto, in general, have been bullish. According to Coingecko charts, Bitcoin has gained roughly 27.8% in the past week, reaching $28,000 for the first time since June 2022.
The current crypto bull is definitely hard to pass up, but bear in mind the inherent risks involved in investing in cryptocurrencies. As with any investment, it is crucial to conduct thorough research and due diligence before making any financial decisions rather than just riding solely on the bandwagon. Furthermore, always make sure that you have your exit strategy well planned to either mitigate your losses or maximize your gains in any given investment.
Giancarlo is an economist by profession with a career spanning nearly two decades. His professional journey has seen him assume vital roles in various government and private organizations such as the Department of the Interior and Local Government (DILG), the National Economic and Development Authority (NEDA), Megaworld Corporation, and the China Banking Corporation in the Republic of the Philippines.
In addition to his civic and corporate pursuits, his forward-thinking approach has led him to manage several prominent websites in the banking and finance sector, notably the Australia-based RateChoice, where he immersed himself in the world of emerging financial technologies and where he found particular interest in Bitcoin all the way back to 2013.
Prior to his addition to Blockzeit’s dynamic team, he held an essential role as Project Manager for initiatives encompassing blockchain, stablecoin, mining, special economic zone development, and iGaming. This noteworthy chapter in his career unfolded under the auspices of InPlan Consultancy Services, Inc., the think-tank of IMPERO Consortium Management Corporation headquartered in Manila, Philippines, and Tokyo, Japan. InPlan, led by a distinguished retired Cabinet member of the Philippines, collaborates directly with IMPERO’s core management team, contributing to strategic planning and business development endeavors.