You’ll no doubt be aware of the recent crypto crash. The market fell when Terra‘s stablecoin dropped dramatically, reducing $40 billion worth of tokens to a fraction of their value, with Bitcoin similarly affected, too.
2022 has proved already to be a challenging time for token holders. Although the outlook may appear grim, it’s not all doom and gloom. Since the onset of the crash, key steps towards recovery have taken place. To help keep the faith, we’ve compiled a list of five reasons why we think crypto will bounce back.
Some people refrain from investing in crypto due to the volatile nature of the market. For others, however, it’s an added appeal. Though the recent crash is a cause for concern, there’s huge possibilities not only for the industry to pick up, but exceed previous levels.
The 2022 crypto crash isn’t the first of its kind. Bitcoin crashed in both 2014 and 2018, and has each time bounced back, reaching an all time high value of $68,000 in November 2021. Once again, we’re already seeing its value rise. Having fallen to under $20,000, Bitcoin has increased to a value of $22,174—at the time of writing.
Volatility works both ways. Much like the stock market, the value of crypto can just easily go up as it can go down.
Crypto has been around since 2008, and countries around the world, such as El Salvador, have already begun to integrate crypto in their society as legal tender.
As attitudes towards crypto change and adoption grows, financial regulations and governance must improve to suit. By regulating the crypto ecosystem, the industry can solidify and recover based on the following reasons.
Market stability. Tightened regulations can decrease speculative market investing. A stable market means higher trading confidence and is more likely to entice new traders into crypto.
Investor protection. Stock exchanges are regulated so no outside manipulation can occur, however, with crypto this currently isn’t the case. Regulations would prevent third party influence and protect traders from false spikes induced by famous bodies. A safer market is a fairer market.
Crime prevention. Crypto crime is a serious problem, with some victims losing more than £36,000 in assets. There’s a huge need for crypto crime prevention, with subsequent laws being put in place to hold any persons caught committing cryptocurrency crimes to account.
How, and whether to regulate crypto has long been debated. Following the recent crash, it’s clear that traders require increased financial protection, to safeguard their assets and mitigate future market crashes.
With market leaders BTC and ETH steady, now seems to be the perfect time for the launch of new tokens. New currencies, such as AGEN, XRX, and DOGEDIGGER, have recently been released and are on the rise.
New tokens joining the crypto market are likely to attract traders, both old and new, encouraging engagement and further stabilizing the market. What’s more, the increased popularity of non-fungible tokens (NFTs) is also helping crypto bounce back.
Once the crash occurred, many investors withdrew their assets having lost faith in blockchain technology. With the help of NFTs, there’s hope that faith will be restored, as well as introducing new investors into the crypto world. With more major brands continuing to become involved with NFTs, crypto continues its ascent into the mainstream.
For those looking to invest in crypto, now is a great opportunity. Low market prices are ideal conditions to diversify your crypto wallet and try out new tokens. Additionally, when buying tokens at a lower price, should there be another crash, traders won’t be at risk of losing a huge investment. However, only invest what you’re willing to lose — it’s better to be safe than sorry!
No one can predict exactly what will happen next, but we can give you some tips on how to be better prepared. Consider diversifying your portfolio and don’t invest solely in one token. Likewise, if the token drops in value, don’t withdraw instantly. Sometimes it’s better to hold off, in the hope of its value rising again. Don’t forget to read, read, and read some more — keep yourself in the loop of all things crypto.
You can read more about NFTs, crypto, and blockchain technology over on our blog.