Where Is the Crypto Crash Headed?

Where Is the Crypto Crash Headed?

by July 20, 2022

Did you know that the worldwide blockchain market will go up to $23.3 billion by 2023?

You’re probably wondering where the crypto crash is headed. The crypto crashing has been going on for a while now, and it doesn’t seem like it’s going to stop any time soon.

But don’t worry. We’ve got your back. Keep reading to see answer the question of why is crypto crashing and explore where is crypto headed from here.


reuters

What Is Crypto?

Cryptocurrencies are digital or virtual tokens that use cryptography to secure their transactions and control the creation of new units. Cryptocurrencies are decentralized, meaning they are not subject to government control.

Bitcoin, the first and most well-known cryptocurrency, was created in 2009. Cryptocurrencies are often traded on decentralized exchanges and can use them to purchase goods and services.

Some popular cryptocurrencies include Bitcoin, Ethereum, Litecoin, and Monero. Cryptocurrencies are often referred to as “altcoins”, short for alternative coins.

Bitcoin is the largest and most well-known cryptocurrency, with a market capitalization of over $100 billion as of 2020. Ethereum is the second largest cryptocurrency by market capitalization, with a market cap of over $20 billion as of 2020.

Litecoin is the fifth largest cryptocurrency by market capitalization, with a market cap of over $3 billion as of 2020. Monero is the tenth largest cryptocurrency by market capitalization, with a market cap of over $1 billion as of 2020.

crypto crash

image via Pexels

Crypto Prices Tumble

The prices of major cryptocurrencies including bitcoin, Ethereum, and ripple have been on a steady decline since early 2018. The crypto crash, as it’s come to be known, has seen prices fall by more than 80% from their all-time highs.

The crash has been attributed to several factors. Let’s look at them in more detail:

1. Regulatory Uncertainty

Cryptocurrencies have come under intense scrutiny in recent months, as their prices have crashed and concerns have mounted over their regulatory future. One of the key reasons for the crypto crash has been regulatory uncertainty.

Cryptocurrencies are not subject to government regulation, which has led to concerns over their abuse. In particular, there have been concerns that they can use cryptocurrencies for money laundering and other illegal activities.

The lack of regulation has also made it difficult for investors to know where to put their money, and many have been hesitant to invest in an asset with such an uncertain future.

However, some countries are starting to take steps to regulate cryptocurrencies, and this could help to boost confidence in the market and lead to a recovery in prices.

2. Hackings

One of the key factors that have led to the crypto crash is the frequency of hackings. In recent years, there have been several high-profile cases of digital currency being stolen, leading to the loss of millions of dollars.
This has made investors wary of putting their money into cryptocurrencies and has contributed to the overall decline in value.

While there are measures that exchanges can take to improve security, such as storing digital currency offline in so-called “cold wallets,” it seems that hacking will continue to be a major problem for the industry.

Until this issue is resolved, investors will likely remain hesitant to invest in cryptocurrencies.

3. Market Manipulation

There have been allegations of market manipulation in the cryptocurrency markets. Some believe that a small group of individuals is artificially inflating prices by buying up large amounts of currency.

This artificial demand can drive up prices, making it difficult for new investors to enter the market. Market manipulation can also lead to volatility, as prices can fluctuate rapidly when there is buy or sell pressure.

While there is no concrete evidence of market manipulation, it is something that investors should be aware of.

If you’re thinking of investing in cryptocurrencies, it’s important to do your research and carefully consider the risks before putting any money into the market.

4. FUD

The crypto crash has been attributed to a variety of factors, including FUD (fear, uncertainty, and doubt). With prices falling sharply, investors have been selling off their holdings, leading to further price declines.
FUD has been blamed for exacerbating the sell-off and exacerbating the crash. However, it is worth noting that

FUD is also present when prices are rising.

In times of market turbulence, FUD can contribute to volatility and can lead to sharp price movements in either direction. While FUD may have played a role in the crypto crash, it is only one of many factors that contributed to the sell-off.

5. The Mt. Gox Effect

The Mt. Gox exchange was once the largest bitcoin exchange in the world. However, it collapsed in 2014 after losing 850,000 bitcoins to hackers.

The Mt. Gox hack had a significant impact on the market and contributed to the general decline in prices that we’ve seen since then. The hack also highlighted the need for better security in the cryptocurrency markets.

Since then, several exchanges have been hacked, and this has led to investors losing confidence in the market.

The Mt. Gox hack is a reminder of the risks that are inherent in investing in cryptocurrencies.

What’s Next for Cryptocurrencies?

Cryptocurrencies have been through a lot in the past year. After reaching record highs in late 2017, prices plummeted in early 2018, leading to what has been dubbed the “crypto crash.”

While the exact cause of the crash is still up for debate, many experts believe that it was due to a combination of overhype and regulatory uncertainty. Whatever the case may be, the crash has left many feeling optimistic.

So, what’s next for cryptocurrencies? According to some experts, the worst is over and prices will start to recover in 2023.

So, if you’re thinking of investing in cryptocurrencies, now may be a good time to do so. Of course, no one can predict the future with certainty, so it’s important to remain cautious and to do your research before investing.
But if you’re careful and patient, investing in cryptocurrencies could pay off in the long run.

The Recovery Plan for Crypto

Despite the crypto crash, there are ways to recover from the damage. They include:

1. Regulation

The crypto market has been through a lot in the past year, with prices tumbling and concerns mounting over the lack of regulation. However, there are signs that things may be starting to change.

In recent months, several countries have taken steps to clarify their stance on crypto assets. And this is helping to boost investor confidence.

In addition, several exchanges have begun to implement stricter Know Your Customer (KYC) procedures.
While there is still some way to go before the market is fully regulated, these developments are encouraging and suggest that the crypto industry is moving in the right direction.

2. Improved Security

The worry over the security of exchanges and wallets is a major issue for potential investors in the cryptocurrency space. Hackings have been a serious problem and have led to the loss of millions of dollars worth of digital assets.

To attract more mainstream investors, exchanges and wallets must beef up their security measures. This may involve hiring more staff to monitor activity, implementing better encryption protocols, and increasing security awareness among employees.

By taking these steps, the crypto industry can begin to address the concerns of potential investors and foster a more trusted environment.

3. FUD Reduction

In the world of cryptocurrency, FUD is abundant. From the constant negative media coverage to the volatile nature of the markets, it’s easy to see why so many people are hesitant to get involved.

However, there are a few things that you can do to help reduce the level of FUD in the market. First, it’s important to increase transparency and provide more information about the underlying technology.

This will help to educate people about what cryptocurrency is and how it works, which may help to dispel some of the myths that have been circulated.

Additionally, it’s important to provide clear and concise information about new projects and developments. This will help to build confidence in the technology and show that there is progress being made.

Finally, it’s also important to encourage more positive media coverage.

Several publications provide balanced and objective reporting on the industry, and by promoting these outlets we can help to change the narrative around cryptocurrency.

By taking these steps, we can help to reduce the level of FUD in the market and make it more accessible for everyone.

4. Improved Infrastructure

For cryptocurrency to be widely adopted, the infrastructure must be in place to support it. This includes things like exchanges, wallets, and payment processors.

At the moment, several projects are working on this. For example, the Lightning Network is a protocol that aims to improve the scalability of Bitcoin.

Similarly, the Raiden Network is working on a solution for Ethereum. By improving the infrastructure, we can make it easier for people to use cryptocurrency and help to promote its adoption.

5. Mainstream Adoption

One of the key factors that will drive the mainstream adoption of cryptocurrency is merchant acceptance. At the moment, several companies accept Bitcoin and other digital assets.

However, there is still a long way to go before crypto is widely accepted by merchants. To increase adoption, it is important to continue working with businesses and convincing them to start accepting cryptocurrency payments.
There are several benefits for businesses, such as lower transaction fees and increased exposure to a new customer base. By convincing more businesses to start accepting crypto, we can help to drive mainstream adoption.

6. Improved Regulation

The cryptocurrency industry is currently in a regulatory grey area. This means that there is a lot of uncertainty about how digital assets will be treated by governments around the world.

To promote the adoption of cryptocurrency, it is important to work towards improving regulation. This may involve engaging with policymakers and working with them to create clear and concise regulations.
It’s also important to educate people about the existing regulatory landscape and help them understand how it may impact them. This help to create a more favorable regulatory environment and make it easier for people to use crypto.

7. Increased Education

One of the barriers to adoption is the lack of understanding about what cryptocurrency is and how it works. To promote adoption, it is important to educate people about the technology.

This can be done through a variety of means, such as writing articles, creating videos, or giving speeches. It’s also important to make information about cryptocurrency accessible to as many people as possible.

They do this by translating materials into different languages or creating easy-to-understand infographics.
By increasing education, we can help more people to understand what cryptocurrency is and how they can use it, along with how to use Bitcoin ATMs. This here will help.

8. Improved Security

Theft and hacks are a major concern for cryptocurrency users. To promote adoption, it is important to make sure that digital assets are safe and secure.

They do this by working on improving the security of exchanges, wallets, and other infrastructure. It’s also important to educate people about security risks and how they can protect themselves.

By taking these steps, we can help to make the industry more secure and reduce the risk of theft and fraud.

Want to Learn More About the Crypto Crash?

So, where is the crypto crash headed? No one can say for certain, but we’ve explored some of the possibilities in this blog post.

Want to learn more about how to recover from the crypto crash, check out our blog!

 

Featured image credit: Unsplash

Print Friendly, PDF & Email
The most important Fintech News from Switzerland weekly