Last year was a terrible one for the Crypto space as it had to go through different scams and collapses. The previous year had been a devastating winter for the market. But, in the present times, things are moving towards a stable position. Read on to know more in detail to have an overall BitTrader!
It seems that there might be a spring for this industry pretty soon. The market may regain its earlier value and dominant position in the mainstream market. With the start of the winter, there might be the advent of bears. The bearish phase is awakening and stretching is grip.
The leaders and analysts of this market need to be active and take some initiatives to revive its condition. Some reasons have led this market to a deteriorating condition. Read this blog to find out more!
Macroeconomic Causes Behind This Turmoil
The collapse and crashes in the Crypto space have been the major reason behind the downfall of this industry. Also, the different macroeconomic factors are prominent reasons behind the downturn of this industry.
High Inflation Rate:
The inflation rates were pretty high in 2022 due to which, the Federal Reserve increased the interest rates. This rate rose to about 4.4% which is the highest in over 15 years!
Challenging Situation To Cope:
With this high inflation, situations became challenging at both, individual and commercial levels to cope with it! There was high tension existing among everyone about a global recession.
Fall In Shares:
All these led to a decrease in some of the top tech-company shares at the start of 2022. After that, the S&P index fell as well, which resulted in the highest drop which was last seen in 2008! Also, the net reduction amount stood at around 8 billion USD.
Decline In Bitcoin’s Value:
After this, the value of Bitcoin started to fall at a steep rate as well. And with this dominant coin, the entire Crypto market started plummeting.
Volatility Of This Market
You may be well aware of the highly volatile situations in this industry. And this condition may have a dual effect on the community. During the Bullish phase, high volatility may lead to benefits for all investors. There will be desirable surges in this market during the bull trend due to volatility.
But, nothing is good even if it comes in excess! Likewise, volatility may lead the entire Cryptocurrency market into a downfall. If the financial market is already unstable and frequent changes in demand exist, volatility will turn everything upside down. It may lead to a complete shatter of the market.
Negative Notion Due To Frauds
Due to the occurrence of different scams and fraudulent activities in the market, people are losing trust in it! 2022 has been a similar year, where there were a high number of collapses and frauds taking place in this industry.
The year started with the crash of TerraUSD and Luna. This led to the downfall of the very famous 3AC, which is hyper-volatile.
Then the gradual downfall of other firms like Voyager and Celsius Network took place. The major collapse of the FTX shook the entire Cryptocurrency community!
Is Revival Of This Market Possible?
All the frauds and crashes are a sign that this market needs proper regulatory guidelines soon! With these rules, the market will be able to revive from Crypto winters smoothly.
There should be a standard and global approach to the Crypto industry that can help in tackling the unfavorable conditions of this market. Many leaders and experts are already talking about this matter and say that such rules will soon come up in the future.
Different nations are now looking after the formation of formal guidelines for this market. This will help them in protecting their citizens from the risk potential and losses that they may otherwise face.
After a dreadful year, the Crypto industry is not moving forward in overcoming the effects of the long winter. Different initiatives and proper guidelines should be there to support the same.
Considering all these, the Cryptocurrency market will revive again this year if everything goes in the right direction! If you are new to Crypto trading and investments then you must check the bitcoin trading platform, Bitcoin smart.