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Can’t seem to figure out when the crypto market is going to make a come back? Check out our blog for market analysis and predictions.
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Introduction
It’s been a tough few months for cryptocurrency investors. The total market value of all digital assets has declined sharply since January, and many individual coins are down by 50% or more. The question on everyone’s mind is “when is the market going to rebound?”
Unfortunately, there is no sure answer to that question. The cryptocurrency markets are notoriously volatile, and predicting future price movements is difficult. However, there are a few factors that could influence the market in the coming months.
One factor to watch is regulation. Cryptocurrencies have come under increased scrutiny from government agencies around the world in recent months. While some see this as a positive development that will legitimize the industry, others believe that it will stifle innovation and lead to heavy-handed restrictions. It’s still too early to say how this will play out, but it’s something that could have a big impact on prices.
Another factor to watch is adoption by mainstream companies. Despite the current bear market, there has been a lot of progress on this front in recent months. Several major corporations, including Microsoft and Starbucks, have announced plans to accept cryptocurrencies or build blockchain-based products. If adoption by institutional investors picks up, it could provide a much-needed boost to prices.
Of course, these are just two of many potential factors that could influence the market in the coming months. So far in 2018, we’ve seen surprise announcements, hackings, and other events that have roiled prices. It’s anyone’s guess what will happen next.
The Case for a Bull Market
If you’re like most crypto investors, you’re probably wondering when the market is going to turn around. After all, the prices of Bitcoin, Ethereum, and other major coins have been in a bear market for over a year now. While it’s impossible to predict the future, there are a few factors that suggest the market may be due for a bull run. In this article, we’ll discuss the case for a bull market and when we may see cryptocurrencies start to recover.
Increased Adoption
There are a number of factors that could contribute to a bull market in cryptocurrencies, but one of the most important is increased adoption.
As more and more people start using cryptocurrencies, the demand for them will increase, driving up prices. This is already starting to happen with some retailers and online businesses beginning to accept Bitcoin and other digital currencies.
If this trend continues, it is likely that we will see a significant price increase across the cryptocurrency market.
Improved Infrastructure
As the cryptocurrency market matures, we are seeing improvements in infrastructure that should help support a bull market. Exchanges are becoming more sophisticated, offering better security and more features. In addition, we are seeing the development of new financial products such as ETFs and futures that will make it easier for mainstream investors to participate in the market. These factors should help increase demand for cryptocurrencies, leading to higher prices.
Favourable Regulations
A number of factors have been cited as driving the current bull market in cryptocurrency, including favourable regulations and an influx of institutional investors.
In terms of regulations, it is worth noting that a number of major economies have recently taken steps to legitimize cryptocurrency and provide clarity around taxation. For example, in February 2018, the Japanese government approved 11 different cryptocurrency exchanges to operate in the country. This provides a level of legitimacy to the industry and makes it more attractive to potential investors.
Similarly, South Korea has also introduced a number of measures to support the growth of cryptocurrency. In March 2018, the country’s financial regulator announced that it would allow Initial Coin Offerings (ICOs) to take place in the country, provided that they met certain conditions. This is a significant development as ICOs have been banned in a number of other major jurisdictions such as China and the United States.
These favourable regulatory developments are likely to attract more institutional investors to the space. Institutional investors are generally risk-averse and tend to avoid investing in asset classes that are not well regulated. The fact that more jurisdictions are taking steps to legitimize cryptocurrency will make it more attractive to this class of investor.
In addition, a number of major financial institutions have announced plans to enter the cryptocurrency space. For example, Goldman Sachs has announced plans to set up a bitcoin trading desk, while Intercontinental Exchange (ICE), the owner of the New York Stock Exchange (NYSE), is planning to launch a bitcoin futures exchange called Bakkt. The entry of these financial heavyweights is likely to provide further legitimacy for cryptocurrency and attract more institutional investors to the space.
The Case for a Bear Market
It’s been a rough few months for crypto investors. The total market capitalization of all digital assets has plunged from over $800 billion in January to around $250 billion today. This has wiped out billions of dollars in value and left many people wondering if the market will ever recover.
Economic Instability
Instability in the stock market is often one of the first indicators of an impending bear market. This can be caused by a number of things, including political unrest, economic recession, or simply a shift in investor sentiment. When there is a lot of uncertainty in the markets, investors are more likely to sell off their assets and move to safer investments, like cash or government bonds. This can cause a domino effect, leading to a decrease in asset prices and an overall decline in the stock market.
Lack of Adoption
There are several key indicators that show a market is maturing, and unfortunately, the crypto market is lacking in many of them. Adoption by institutional investors, for example, is one of the most important drivers of a maturing market. In order for institutions to invest, they need to feel confident that their investment will be safe and that there is enough liquidity in the market to exit when they want. Unfortunately, the crypto market is still very volatile and lacks the kind of infrastructure that would make it appealing to institutions.
Stringent Regulations
In order for a market to experience a bull run, there needs to be high demand for the assets therein. When it comes to digital assets, demand is driven by investor confidence. And, currently, there are two main factors eroding investor confidence in the crypto markets: stringent regulations and bearish market conditions.
Strict government regulations could limit the use cases of digital assets, thereby decreasing demand and preventing a bull run. For example, if country A enacts laws that make it difficult for companies to use crypto as a payment method, then the demand for crypto in country A would decrease. This would have a ripple effect on the global crypto markets and could prevent a bull run from occurring.
Bearish market conditions are another major factor that could prevent a crypto bull run. For example, if the price of Bitcoin (BTC) falls below $6,000 and remains there for an extended period of time, it would signal to investors that BTC is not a good investment and they should invest their money elsewhere. This lack of confidence could lead to more selling pressure and further downward price movement, preventing a bull run from happening.
Conclusion
It’s impossible to know for certain when the crypto market is going to rebound, but there are some experts who believe that it could happen as early as 2019. In the meantime, it’s important to be careful with your investment and not to put all of your eggs in one basket.
