Blockchain technology will be used in the future for sure, but cryptocurrencies had a tough time from the start. There have been many crashes in the past, but because it’s a more popular topic nowadays, people are taking it more seriously. The investments in the past couple of years have also been greater than in the past decade, so it’s understandable to be worried when something bad is happening.
But, crypto enthusiasts will always tell you that BTC and ETH are here to stay, and they have some great reasons for it. If you still haven’t spent your crypto on NASCAR odds at the online casino, you should look for a few options before the crash. A lot has happened in the first half of 2022, and you can only imagine what is coming after the bear market.
Cryptocurrencies Have Never Been Stable
If you plan to invest in crypto, you should always have in mind that there isn’t a stable coin, even if some are named stable. Crypto doesn’t work on the same principles as fiat currency, and it’s far less supported by the government and people.
This is a big disadvantage cryptocurrencies have over fiat, but there are many advantages that keep things going.
The biggest crash in recent history happened in May of 2022, and there are a few reasons why this happened. Investors are usually the biggest reason why crashes happen, but they can be influenced by the makers of the coin. When a big investor wants to pull out a huge amount of money, it can influence other people to do the same, which can crash any coin.
Why Are Cryptocurrencies Crashing?
Some of the things that can cause crashes to include inflation, interest rates, and other macroeconomic factors. The end result actually causes people to lose trust in the currency, and they want to pull out before it crashes, even if it doesn’t have to happen.
Crypto has a big problem when it comes to regulations, so governments can have a big impact on the outcome of any coin. Some of the biggest countries in the world, like China, have been tough towards crypto regulations, and they actually caused drops in prices in 2021.
The biggest influence on the current market status and crypto prices is the inflation which is happening on a global basis. It affected the whole world, which means that there will be economic damage to every country, especially third-world countries.
Has It Happened Before?
People that are involved with crypto for at least a few years know that crashes happen all the time. This is a common thing for lower-ranked coins that have more fluctuations than BTC or ETH. But, even BTC has its ups and downs, which have a big impact on other coins every time it happens.
Everyone was surprised when Bitcoin reached $20k in 2017, and many thought that things would be going fast with crypto and we would have a new global currency.
But, in less than a year, it dropped under $4k. This can cause some heart attacks, but after a few drops in price, you will get used to it, and you will only expect the next record.
Should You Invest In 2022?
The beginning of the year was tough for every cryptocurrency because BTC dropped more than $30k. This might be the best time to buy, but no one can be certain what will happen in the next couple of months.
Some people think that this is the end of the bear market which means that the prices will go up. Even if you have multiple investments, everything depends on BTC because it affects every other coin.
Stable coins are also one of the reasons why crashes happen because they are some kind of guarantee for safe transactions and safekeeping. But, LUNA has been the main topic these days because it took a huge blow which made USDT go under $1, which never happened before.