After months of speculation and hype, bitcoin crashed this week. The cryptocurrency was trading at $20,000 per unit on December 17, but at the time of writing, some analysts believe that the market has reached its peak and will start to decline from here;
Others believe that this is just another minor setback to an uptrend that will continue into 2023. With the price starting to stabilize again, we can take some lessons away from the recent crypto crash and how it might affect the industry as a whole moving forward.
The Upside of a Crypto Market Downturn
crash is still fresh on everyone's mind. However, the difference with this crash and others is that we know what happened.
Mt.Gox hacked nearly $4 billion in Bitcoin and other cryptocurrencies
- - the largest exchange of its kind at the time
- - and this led to a massive crash in the cryptocurrency as investors lost a lot.
There are always negatives that come from such circumstances, but there are also a lot of positives. For one thing, cryptocurrency has become more popular as a result because all of this happened in 2013-2014, before most people actually started noticing cryptocurrency on a large scale.
Is crypto headed for a crash?
This latest price drop is not a one-time event. That's not a bad thing, it's actually how business cycles work.
The world did not fall into disarray when bitcoin prices dropped from $19,000 in December 2022 to around $3,000 in February 2018.
In fact, bitcoin never fell below $18,000 again.
Today it is around $4,400 and the forecast for bitcoin prices in 2020 ranges from $22,000, so there is still hope that our digital currencies will once again rise and grow along with the expanding global economy and continuous technological advancement.
Of course, if you're getting into the cryptocurrency space or have been holding your investments in cryptocurrency because it's soared to incredible heights over the past couple of years (as many people have), you might be wondering if you're headed for financial disaster.
Unfortunately, no one knows for sure what cryptocurrencies will do next, but because they are decentralized currencies that don't depend on any central bank or government agency like Bank of America or Apple Pay - the only way crypto will eventually crash is if people stop Using it or refusing to invest any more money in it, but so far none of these seem likely any time soon, thanks in part to these recent developments.
Why Cryptocurrency is falling now?
is gaining legitimacy in less developed countries, and these new markets usually have less developed financial systems and regulations.
More exchanges, more liquid; More fiat currencies can be exchanged for bitcoin, and the price is starting to reflect that.
There are a few possible reasons why Bitcoin may stop growing. It is worth noting that some see the current volatility as an opportunity while others believe that it will again drop in price, bringing other cryptocurrencies down with it. As blockchain technology develops further, expect government regulators around the world to step in as they consider new ways to settle crypto-to-fiat exchanges and enhance transparency on cryptocurrency exchanges.
Is crypto ever going to recover?
lost a staggering $40,000 and fell below $22,000 for the first time since then. What does this mean for cryptocurrency traders and investors who are holding onto it in hopes of getting its value back in 2023?
I don't think anyone can answer that question now. Anyone with a limited understanding of trading knows that such a large drop usually means bad news is on its way.
Traders may need to prepare themselves for further selling and analysts may expect a further drop in cryptocurrency prices over the next few days or weeks as short sellers rush out of positions while they still can.
Should I be selling my crypto?
I believe in cryptocurrency and have been following it since I started. The market has seen ups and downs over time, should I sell some of my cryptocurrency if there is a crash?
If you are currently a long-term investor and are not concerned about short-term price fluctuations, don't worry about selling your cryptocurrency.
Watch the market and make sure you only sell when you don't want to, when you need to.
Will crypto rise again?
With so many new currencies, regulations changing daily, and entire coins being added or removed from exchanges on a whim, it is hard to stay on top of cryptocurrency markets.
While Bitcoin might seem like a safe bet for investors who are new to this, that is not always the case.
The cryptocurrency market fluctuates wildly with new coins coming into play every day and savvy investors need to be able to quickly pick up trends in order to get ahead.
With regulations and hacks happening at an unprecedented rate, investors have taken notice and decided that now might be time for them to back out of what seemed like a great investment before.
What’s Causing This New Dip?
A dip in value is one thing, but a crash is another. People are worried about two big developments that could send Bitcoin’s price down significantly: a shift from centralized exchanges to decentralized ones and an increased number of tokens.
Decentralized exchanges allow for more peer-to-peer trading with cryptocurrencies, which makes them more vulnerable. There are also worries that governments around the world will clamp down on unregulated cryptocurrency trading as well as Initial Coin Offerings (ICOs).
It seems like only a matter of time before regulators step in and make it difficult for people to buy or sell tokens, especially considering how so many coins have been used for shady dealings in recent years
Fundamental Analysis for Beginners
Bitcoin and other cryptocurrencies are a relatively new phenomenon and can be difficult for some people to understand. To help you better understand, we've created this basic crypto-currency guide for beginners.
You'll learn about how cryptocurrency works, how it differs from traditional currencies, and how you can invest in it. So let's jump in!