Matthew Dixon – Founder of AI Crypto Ratings platform Evai, examines the cryptocurrency market decline following the US inflation rate and interest rate announcements in recent weeks. He also explores the role Artificial Intelligence and Crypto Ratings can play in identifying value in the bear market which has seen the price of Bitcoin (BTC) fall below $20,000 for the first time since December 2020.
Like a bear with a sore head the crypto market has been suffering a hangover from recent announcements coming out of the US which have been compounded by the high-profile headaches caused by LUNA and Celsius Network. Last week, the world waited with bated breath on the outcome of the U.S. Federal Open Market Committee (FOMC) interest rate decision. Rates were set to rise as a financial policy response to the highest inflation numbers recorded in 40 years…but by how much? When the 75 basis-point rise was announced on Wednesday night, markets took a while to digest before suffering a steep selloff to challenge key levels of support not seen for over two years. With board members of the Federal Reserve speculating a further 150 basis points by end of 2022 traders have been left searching for ways to navigate the economic headwinds, but more on that shortly.
The Fed’s decision to raise interest rates stems from the high inflation figures plaguing the USA and other countries around the globe. Just this week reports came out in the US reflecting a rise of 8.6% in the Consumer Price Index in May 2022, with housing, food and fuel being noted as the highest contributors. With the 1% increase since April, the annual rate of inflation is now running at the highest level since December 1981.
Soon after the announcement, the following day, the Dow dropped over 800 points as investors worried about the Fed’s rate hikes to slow surging inflation. The rest of the world quickly followed suit with the Swiss Central Bank increasing interest rates for the first time this cycle, the Bank of England and the majority of central banks in GCC (Gulf Cooperation Council) also waded in with steep rate increases.
Economic Stagflation?
“It is not the first time I have witnessed markets correct sharply in the 30 years that I have been working in finance” said Matthew Dixon, CEO of Evai Crypto Ratings platform. “The causes may vary but in general, market turmoil, such as the dot com bubble in 2000, the global meltdown in 2008 and COVID 2020, bring policy responses to either ease or tighten monetary conditions to foster or slow economic growth, restoring equilibrium to maintain stable growth and inflation. However, we need to go back many years to witness the economic landscape we find ourselves facing in 2022. The specter of stagflation is upon us, and policy makers will need to walk a tightrope to avoid catastrophe. Because of high inflation, higher interest rates are required to reduce price pressures, hence the current rate rises, however, at the same time low interest rates are needed because economic growth is tepid at best. What a conundrum. “Whilst I envision inflation will come down sooner than expected and US Federal Reserve will eventually reverse their decisions and bring interest rates back down, the damage to long term growth will already have been inflicted.”
Perhaps all that QE (money printing) was not such a good idea after all, as it inflated money supply, with that money flowing into assets that did not create real growth. These are the reasons that markets are taking a serious turn for the worse and yet as the saying goes “necessity is the mother of invention” and the challenges that birthed the world financial crisis of 2008, namely a failure of traditional ratings, are now being faced head on via the creation of the Evai’s unbiased crypto ratings platform.
Evai’s Unbiased Crypto Ratings – A Technological Breakthrough
Academic studies have taught us that the “market” cannot be beaten on a risk adjusted basis and yet, empirical testing shows that Evai Crypto Ratings are outperforming the market on just such a measure.
Traders now have a system at their disposal which embraces the latest cutting-edge technology, employing Artificial Intelligence, coupled with Machine Learning to provide unbiased crypto ratings. Every crypto asset rated by Evai’s proprietary AI and Machine Learning technology undergoes a rigorous evaluation that scrutinizes the asset’s current data against nine Power Factors and over 20 KPI’s, before awarding an unbiased rating.
Given the immense number of crypto assets out there, more than 19,000 at last count, an automated system is an absolute necessity. While early crypto rating platforms developed by the likes of Weiss Crypto Ratings utilise expert panels to assess assets, in reality it is impossible to review all these assets manually to give meaningful insights in real-time.
Over the past two years Evai have pioneered data management techniques that have only recently been made possible due to the latest advances in Artificial Intelligence and Machine Learning. Fueled by the success of the ratings over 1 year, the research team and AI experts at Evai are not standing still in the bear market and are in pursuit of constant upgrades to maximize the performance and predictive power of the ratings.
Evai leads the field in unbiased crypto ratings and can pick out winners and losers in advance of price moves, often hours in advance. This is the edge required to navigate todays challenging bear market conditions where traders are looking to protect funds and identify gems amongst a sea of red candles.
Evai Crypto Ratings in Action
In our recent Market Watch episodes, as well as our Ratings Review 1 Minute Roundup features, we have revealed over and over again how Evai Crypto Ratings are able to show predictive value by identifying rises and falls before they happen. This gives crypto traders the ability to invest or divest from assets to make gains and take profits, even in the current bear market. For example, $SEELE token gained 66% following an upgrade while $HNT pumped 80%, after an upgrade from D to C1. Further examples include the upgrade of $COV which saw its rating move from C2 to B3, shortly followed by a significant pump in price of over 125% in less than 24hrs!
Most famously, $LUNA experienced over 140% gain following its Evai Rating upgrade last November, with a significant downgrade in advance of its recent collapse, thus showcasing how Evai enables crypto traders to navigate the volatility in both directions.
Even large-cap tokens such Binance Coin (BNB), Litecoin (LTC) and Bitcoin (BTC) showcased the power of Evai when recent price declines were signaled ahead of time by rating downgrades, enabling traders and investors alike to close positions or even short sell for profit.
Especially in times of increased market volatility, when emotions may be running high, Evai’s unbiased and automated Multi-Factor Ratings system, powered by AI and Machine Learning, can make the difference between trading success and failure.
The Future is Bright…The Future is Crypto
Far from having to hibernate during a bear market, investors are now able to build and protect wealth utilizing Evai’s Multi-Factor Ratings system. Evai.io deploys the latest AI and Machine Learning technology to deliver actionable data, empowering investors in any market conditions. In a world which is rapidly digitising all assets, the time has come for the next generation of ratings model.
