Why is the crypto market down today?
Why is the crypto market down today?
The cryptocurrency market is declining today as macroeconomic factors deter investors and reduce liquidity.
The price dynamics of the cryptocurrency market continue to tilt downwards as investors and companies digest the consequences of the accusations against Binance and Coinbase.
The lawsuits have also impacted the decentralized financial markets (DeFi), reducing overall liquidity, and most analysts believe there will be more pain in the near future.
Bitcoin price lags behind equities
Cryptocurrency exchange rates remain highly correlated with the Dow and S & P 500 indices, and most major banks still expect a severe recession in the US sometime in 2023, which did not stop major stock indices from hitting annual highs after the US debt ceiling deal was finalized.
The US Securities and Exchange Commission’s (SEC) crackdown further widens the gap between equities and bitcoin. Since the complaint was filed, outflows from digital asset investment products have totaled more than $88 million.
TVL and volume remain low
The attack on central exchanges has also increased inflows and outflows from Bitcoin exchanges. Exchange inflows indicate increased selling pressure, while outflows are typical of average self-deposits.
Despite net inflows into blockchain self-depositories, DeFi did not see an increase. The Total Value Locked (TVL) index is a standard way of studying the state and climate of the crypto-currency markets. According to DeFiLlama, across all protocols, the TVL index has fallen by 0.5% in the last 24 hours and lost $120 billion as at 5 April 2022.
Bank of China issues $28 million worth of digitally structured debt on the Ethereumblockchain
The securitised tokens are subject to the laws of Hong Kong and Switzerland.
On 12 June, BOCI, a subsidiary of Bank of China Investment Bank, announced the issuance of CNY200 million (USD28 million) worth of digitally structured bonds minted on the Ethereumblockchain.
The initiative makes BOCI the first Chinese financial institution to issue a securitized security in Hong Kong. Investment bank UBS helped develop the product to position it among clients in the Asia-Pacific region. Ying Wang, deputy CEO of BOCI, commented:
In tandem with its growth, UBS has expanded its labelling into structured products, fixed income securities and buy-back financing. In December 2022, the company issued a $50 million fixed income bond under English and Swiss law, which was digitized on an authorized blockchain.
Cointelegraph previously reported that Hong Kong opened access to cryptocurrency exchanges to retail customers on 1 June.
About two weeks later, Joseph Chan Ho-lim, the Hong Kong government’s finance minister, said the SAR was “actively” involved in the blockchain industry and planned to establish a framework for regulating fixed currency transactions within a year.
On 16 February, Hong Kong issued a HK$800 million green bond. Hong Kong dollars with Goldman Sachs’ GS DAP tokenization protocol and an annual yield of 4.05%. Hong Kong launched two tradable cryptocurrency futures funds in December 2022 and raised over $70 million before launch.
Why is crypto crashing and will it recover
The crypto market, short for “cryptocurrency market,” refers to the collection of digital assets or virtual currencies that are designed to work as a medium of exchange.
The crypto market is a decentralized market, meaning that there is no central authority controlling it. Transactions are recorded on a public ledger known as the blockchain, which allows for transparency and immutability. The value of cryptocurrencies can be volatile and can fluctuate based on a variety of factors, such as market demand, regulatory changes, and technological developments.
Will crypto crash further
It’s important to note that the crypto market is highly volatile, and it’s not uncommon for it to experience significant price swings in either direction.
The crypto market has historically been subject to various factors that can cause price declines, such as market speculation, regulatory changes, security concerns, and technical issues. These factors can contribute to further crashes in the crypto market.
It’s important to keep in mind that investing in cryptocurrencies is associated with risks and investors should always do their own research and assess their risk tolerance before investing. Diversification and a long-term investment strategy can help investors mitigate the risk of any potential crashes in the crypto market.
Why is crypto crashing time to time
There can be various reasons why the crypto market experiences crashes or significant price declines. Here are some of the most common factors that can cause crypto crashes:
- Market speculation: The crypto market is highly speculative, and investors may buy or sell large amounts of crypto based on market sentiment, news events, or rumors, leading to price volatility and potential crashes.
- Regulatory changes: Changes in laws or regulations related to cryptocurrencies can have a significant impact on the market. For example, if a government announces a ban on cryptocurrency trading or mining, it can lead to a mass sell-off and a crash in prices.
- Security concerns: The crypto market is still relatively new, and security concerns such as hacking incidents or scams can cause investors to lose confidence in the market and sell their holdings, leading to a market crash.
- Technical issues: The underlying technology behind cryptocurrencies can also have technical issues, such as network congestion or bugs in the code, leading to price declines.
- Economic factors: Like any asset class, the crypto market can be affected by economic factors such as inflation, interest rates, or geopolitical tensions.
It’s important to note that the crypto market is still highly speculative and volatile, and investors should be prepared for significant price swings. It’s essential to do thorough research and make informed investment decisions based on individual risk tolerance and investment goals.
Is crypto going to recover
It’s important to note that the crypto market has historically been highly volatile, with periods of both sharp price increases and sharp price declines.
While the market can experience significant crashes, it has also shown resilience and has recovered from previous crashes. The recovery of the crypto market is dependent on various factors such as market sentiment, adoption, regulation, and technological advancements.
It’s essential to keep in mind that cryptocurrencies are a relatively new asset class, and there is still much uncertainty surrounding their long-term potential. Investors should carefully consider the risks and potential rewards before investing in cryptocurrencies and should always do their own research before making any investment decisions.
What will happen to the crypto market
2021-2022 was a real test for the cryptocurrency market. People realized how important investments are to make a financial reserve, a so-called cushion. In addition, people spent less on entertainment, clothes, and travel, and many decided to invest the money they saved.
Therefore, even those who were far from cryptocurrencies and preferred traditional types of investing got interested in this topic.
The unprecedented demand for crypto led to a crazy rise in the price of not only major coins but also those that were predicted to have less prospects.
But in 2022, the cryptocurrency market was also hit by a crisis, probably the most significant since its existence. Bitcoin collapsed from $68,000 per coin, to $17,000. Due to such a “roller coaster” rate, it is reasonable to ask what will happen to the cryptocurrency and what its prospects are.
Regulation of cryptocurrency – why it is so actively discussed in the world
Talks about the need to regulate the crypto market have been going on for a long time, but somehow sluggishly and not very loudly.
But after the collapse of Terra and Luna, it became louder and more confident – investors, who had invested solid funds in these coins, were left with nothing in a matter of days.
But that happened back in May, and since then the market has continued its free fall.
Cryptocurrency companies began laying off employees and cutting costs, and some, like Three Arrows Capital and Celsius, declared bankruptcy altogether.
In light of recent events, many experts have started talking about the inevitability of the regulation of cryptocurrencies. Markus Sotiriou, an analyst at GlobalBlock, says that regulation is inevitable, and one should be prepared for it.
According to experts who are in favor of controlling the crypto market, it can make crypto more attractive for investors and less interesting for cryptocriminals.
What does regulation of the crypto market mean for investors
The stability of the crypto market will bring new players to it, and this will have a positive effect on its condition. So far, not all large companies are considering the possibility of accepting payments in cryptocurrency.
For example, such giant as Amazon is just taking its first steps in this direction, while Tesla has long been accepting bitcoins and other currencies.
Stability and centralization will bring new companies into the field. Of course, mass payments in crypto for goods and services are still only dreams, but for long-term investments, cryptocurrencies with the regulation will become even more promising.
While some experts rejoice and see a future in such regulation, others say that centralization of management is the destruction of the very nature of cryptocurrency. What makes it unique and attractive is that the crypto market has no such regulation.
They also say that regulation will destroy the most attractive feature of the crypto market: anonymity. Today you can have a huge fortune in coins, but no one will ever find out about it unless you tell them yourself.
Regulation will make complete confidentiality impossible, and that, according to experts, will lead to a significant investor outflow.
Therefore, a problem arose – on the one hand, regulation is necessary because the crypto market has reached a scale where it is no longer possible to function without management, on the other hand, it contradicts the very nature of cryptocurrencies.
Experts see the way out in self-regulation, that is, putting management functions in the hands of companies and major exchanges.
Consumers and investors are not thought to favor industries with self-governance. But recent studies show that they are even less favorable to state institutions. In addition, self-government is more attractive to companies that want to enter this market, but neither its decentralization nor state control attracts them.
Summarizing all of the above, we can state that the future of the crypto market is uncertain, but we should not expect changes in the near future. Global reforms and transformations are a long process. So, what should investors do now, what will happen to bitcoin and other popular currencies? What to invest in so as not to lose everything?
What awaits bitcoin in the near future
Bitcoin is not only the first cryptocurrency. It is an indicator of the market as a whole. It is believed that what happens to this coin happens to the crypto market as a whole. Let’s analyze – in November 2021 bitcoin was worth $68 thousand and in May 2022 it will be worth $17,5 thousand. Along with bitcoin, other coins also collapsed.
Opinions of experts differed greatly in forecasts. Some of them are sure that bitcoin will fall to 10 thousand dollars, others are sure that it hasn’t reached its maximum and that 100 thousand dollars is not the limit yet. And many agree that the last figure – this is not a forecast, but reality, the only question is when it will be reached.
Be that as it may, professionals advise to refrain from rash steps. You should not keep more than 5-7% of savings in cryptoassets if you consider crypto for long-term investments.
According to Kiana Danyal, author of the bestseller “Cryptocurrency Investing for Dummies,” you can predict the future of bitcoin by looking at its past. The coin was already showing huge jumps in 2011, after which the price would fall. But the growth eventually recovered. From this, we can conclude that bitcoin volatility is short-lived. Strong and long-term growth awaits us very soon.
What awaits the Ether in the near future
Speaking of this altcoin, the first thing to say is that it is on the verge of a huge change. The fact is that Ethereum is on the verge of a global upgrade.
The technology will be switched to a less energy-consuming version. The developers have been preparing for this event for 7 years. They have been running tests, fixing bugs, and as a result, The Merge update promises to be a breakthrough.
Experts believe that if all that the developers announce, it will be possible to implement, then the future of Ethereum is bright. According to some estimates, the coin may reach its maximum of $4,000 by the end of this year. But the boldest forecasts promise the currency to cross the threshold of $12 thousand in a year.
What are experts, professional investors, and crypto players doing now? They carefully watch the coin and buy it up.
After the update, the growth of the rate is inevitable, the way it will not be so sharp and jumpy, as some experts predict, but it will be in any case. Even if the developers will not be able to fully implement their ambitious plans, the near future of Ethereum is promising.
If everything is more or less clear with the two major coins, the answer to the question of the most promising cryptocurrencies in 2022 is waiting for many.
What cryptocurrencies to look out for in 2022
We are not going to talk about the benefits of buying bitcoin at its lowest price or how promising it is to invest in Ethereum at the threshold of its renewal. We will talk about those coins that have potential according to experts.
The Sandbox
Speaking of this currency as one of the most promising, it is worth to spend some facts. In mid-2020, the currency started at $0.05.
In November 2021, when the crypto market was at its peak, the currency was trading at $8.4, with a profit of 16000%.
Today, like the entire crypto market, SAND is experiencing a significant decline. But the prospects and potential of the coin are huge. Therefore, who buys it now at a price much lower than its peak, can count on large dividends in the future.
What makes the coin unique? Its developers promise nothing less than a combination of real and virtual worlds with the help of NFT technology. Even now, users can travel around the world of Sandbox, to interact. You can create your own characters and take part in games to earn money on this.
XRP
Experts advise not to pay much attention to this cryptocurrency’s past. In 2020, the developers had problems with the U.S. Securities and Exchange Commission, which could not but affect the price of the coin, which dropped XRP from the third to the sixth place in the market valuation.
The currency can now be bought for a minimum. Analysts now predict that investors who invest $1 a token in XRP could make a handsome profit. The price is expected to rise to $2.14 within a year.
Shiba Inu
Speaking of promising cryptocurrencies, we could not ignore meme currencies. The most popular and promising among them is SHIB. Created as a joke in 2020, the currency was a development of Metaverse. Today this coin is called the “Dogecoin killer”.
Experts’ opinions about this cryptocurrency are divided. Some believe that all currencies, without exception, are memes and their popularity is a social rather than financial phenomenon, while others believe that there are reasons for the growth of the rate. Anyway, Shiba Inu is in the top 20 cryptocurrencies by capitalization.
It is difficult to talk about the future of such a volatile but attractive market as cryptocurrencies. We all see from examples that you can become rich in a very short period of time, and you can lose everything in a matter of days.
What the regulation of this market will look like, what kind of growth or further decline we will see, it is difficult to predict even now.
But in any case, the crypto market will develop and now there is a great opportunity to be at the origins of a new story. In what currencies to invest, everyone decides for himself, but to bet only on this asset for investment, still do not.