It’s been a tough few months for cryptocurrency investors. After reaching record highs in December, prices have been on a steady decline since. Many are wondering if crypto is ever going to go back up.
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Introduction
It’s been a tough few months for cryptocurrency. After reaching an all-time high in December, prices have been steadily dropping, and many investors are wondering if the market has hit its bottom.
There are a number of factors that could influence whether or not prices will rebound in the near future. Below, we explore three key considerations that could affect the direction of the market.
What isCrypto?
Cryptocurrency is a digital or virtual asset designed to work as a medium of exchange. It uses cryptography to secure and verify transactions as well as to control the creation of new units of a particular cryptocurrency. Essentially, cryptocurrencies are limited entries in a database that no one can change unless specific conditions are fulfilled.
Cryptocurrencies are decentralized – meaning they are not subject to government or financial institution control. Bitcoin, the first and most well-known cryptocurrency, was created in 2009. Since then, numerous other cryptocurrencies have been created. These are frequently called altcoins, as a fusion of bitcoin alternative.
Cryptocurrencies can be bought and sold on exchanges and stored in wallets. They differ from traditional currencies because they are decentralized – meaning they are not subject to government or financial institution control. Bitcoin, the first and most well-known cryptocurrency, was created in 2009. Since then, numerous other cryptocurrencies have been created. These are frequently called altcoins, as a fusion of bitcoin alternative.
Cryptocurrencies can be bought and sold on exchanges and stored in wallets.
How is the Market forCrypto?
TheValue of Bitcoin is at anAll Time High, Breaking the $20,000 Mark
It’s been a wild ride for cryptocurrencies in 2020. At the beginning of the year, the total market capitalization for all digital assets was just shy of $200 billion. By mid-March, it had tumbled to around $100 billion as COVID-19 upended global markets. But since then, crypto has been on a tear, more than doubling in value to surpass $400 billion today.
And the run appears to be far from over. Just today, the value of bitcoin surged past $20,000 for the first time ever. Ethereum isn’t far behind, with its price climbing above $600 in recent days.
So what’s driving this rally? And is it sustainable? Let’s take a look.
There are a few key factors driving the cryptocurrency surge this year. Firstly, more and more institutional investors are turning to digital assets as a hedge against inflation. With central banks around the world pumping trillions of dollars into their economies through quantitative easing programs, many investors fear that traditional fiat currencies will lose value over time. Bitcoin and other cryptocurrencies offer a potential solution to this problem since they are not subject to central bank manipulation.
Secondly, increasing interest from big companies could be helping drive crypto prices higher. PayPal recently announced that its customers will be able to buy and sell bitcoin and other digital assets using their account starting next year. And Square’s Cash App has also allowed buying and selling of bitcoin since last year. These moves could help bring cryptocurrencies into the mainstream and make them more accessible to everyday investors.
Finally, there’s simply increased demand from individuals who see digital assets like bitcoin as a way to make money quickly. Unlike stocks or bonds, which can take years to generate returns, crypto prices can swing wildly up or down in hours or even minutes—giving investors ample opportunity to cash in on short-term gains. For risk-tolerant investors who can stomach the volatility, crypto can offer a welcome addition to any portfolio.
Of course, it’s important to remember that cryptocurrencies are still highly volatile and risky investments. So if you’re thinking about buying into the craze, make sure you do your homework first and only invest what you can afford to lose
When WillCrypto Go Back Up?
Cryptocurrency is a digital or virtual asset designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of new units of the currency. Cryptocurrencies are decentralized, meaning they are not subject to government or financial institution control. Bitcoin, the first and most well-known cryptocurrency, was created in 2009. Since then, numerous other cryptocurrencies have been created. These are commonly referred to as altcoins, as a fusion of bitcoin alternatives.
The first step is understanding what caused the crash.
On January 17, 2018, the South Korean Government announced new regulations pertaining to cryptocurrency trading. The announcement sent shockwaves throughout the market, causing a rapid sell-off that took Bitcoin from a high of $17,135.20 on January 6th to a low of $9,199.59 on January 17th. The sell-off continued for the next few days before finding some support around $11,000 on January 22nd. The crash was likely exacerbated by automated trading programs (bots) that execute trades when certain price thresholds are met. These bots are programmed to sell when prices reach a certain level in order to cash in on profits or buy when prices fall to take advantage of lower prices.
The second reason for the crash was a change in Google’s advertising policy regarding cryptocurrency-related content. On March 14th, Google announced that it would ban all cryptocurrency-related advertising from its platform starting in June 2018. This announcement likely had a similar effect as the South Korean government announcement, causing a rapid sell-off as investors fears Google’s decision would lead to similar decisions from other major online platforms such as Facebook and Twitter.
The last major reason for the crash was due to concerns over regulation and taxation by various governments around the world. In early April 2018, it was reported that both China and India were considering banning cryptocurrency trading altogether. These reports led to another sell-off as investors feared that other countries would follow suit.
Now that we know what caused the crash, we can look at whether or not crypto is going to go back up.
There are several reasons to believe that crypto will go back up in value eventually:
1) Most crashes are followed by rebounds;
2) The underlying technology (blockchain) is still sound;
3) Numerous institutional investors continue to show interest in crypto;
4) Fears over regulation have largely been overblown; and
5) The market is still young and growing rapidly
Conclusion
All in all, it seems that the market is still trying to find its footing after the large crash at the beginning of 2018. While there are some positive indicators, such as the increasing numbers of institutional investors entering the space, it’s still too early to say for sure if crypto is going to go back up. Only time will tell.
