Investors are in a frenzy as a result of a variety of escalating red graphs on different crypto-currency exchanges. Numerous investors who were hoping to profit quickly from the digital. Money have had their expectations shattered by the current crypto collapse.
Not only has the value of crypto-currency experienced. Many of its worst months, but it has also misled devoted investors. Who believed that these assets might provide them with some economic security.
Currently on thin ice with a murky future? What lies in store for crypto-currency investors throughout the world?
Researchers in academic and non-academic are also becoming highly interested in crypto-currency. As a different type of currency system (Amri et al., 2019). It is crucial to evaluate the current bitcoin research and suggest prospective future research fields. Due to the expanding field of crypto-currency study. Some examples on cryptocurrency research topics are CBDC (central bank digital currency). Money laundering, crypto-currency market, crypto-currency adoption and cyber-crime economy.
Now let’s look at some of the causes of this crypto-currency instability.The harm it has caused both investors and exchanges. Some of the things to watch out for in the near future.
As things stand
One of the finest years for crypto-currency investors was 2021. Around November 2021, the price of one bitcoin. Reached an all-time peak of $69,000 (about Rs. 54.5 lakhs), while the market capitalization of all bitcoins at the time. Just under $3 trillion. Before the end of a year, analysts and crypto-currency enthusiasts predicted. That Bitcoin will surpass the $100,000 threshold. They had no idea that things were about to get much worse.
The crypto market fell under the $2 trillion level in January 2022. After that, everything went downward.The exception of a minor comeback in April. The largest crypto-currency in the world, Bitcoin.Now selling at $19,165 (about Rs. 15 lakhs). Down 8.47% over the past week. This is almost at its lowest point ever in years.
In all, it has lost almost 70% of its value since hitting an all-time high in November of last year. While other tokens such as Solana, Dogecoin, and Avalanche among others have suffered losses of up to 90%. The market capitalization of all crypto-currencies as of right now is $860 billion.
How did we get here?
Global inflation is viewed by many professionals who have been commenting on and writing about the crypto-currency field for years as one of the main architects behind the industry’s poor predicament.
One of the greatest increases in interest rates in 28 years has been made by the United States Federal Reserve in an effort to escape the economic trap. A 0.75 percent increase may have originally not bothered the crypto market, but many market analysts think it has increased inflation rates.
Inflation has compelled central bankers throughout the world to increase interest rates in order to decrease market liquidity. This is the main cause of the decline in crypto-currency markets. The smaller tokens won’t likely survive the collapse, but the popular tokens are simply losing value and will presumably recover once the depression is through. Cryptography lacks a suitable conduit to display accounts and is hence untraceable. In essence, it has served as a highway for hackers and illegal enterprises (professionalessayservice, 2019).
Young entrepreneurs and business students who have started any online business and want to invest in crypto-currencies then they must be aware of these detrimental situations.
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Stock market has entered the bear zone, which denotes a 20% decline from its most recent high. The NASDAQ (National Association of Securities Dealers Automatic Quotation System) has plunged 33 percent in 2022, while the S&P 500 (Standard and Poor’s 500) has fallen by more than 21%. Along the Nifty50 down 15% from its all-time peak (18,604.45) in October 2019. It is obvious that inflation has contributed to the demise of crypto-currencies, and a lot of people are becoming wary of the concept of investing in these kind of erratic assets. The perception of crypto-currencies as investments has significantly shifted.
The decentralized structure of crypto-currency and its untraceable transaction history are two reasons why many governments are frightened of it. The Indian government established a flat 30% tax upon the transfer of digital assets such as NFTs, at the most recent budget session in recognition of the potential hazards involved. The NPCI (National Payments Corporation of India) also banned the UPI transfer capability for crypto-currency wallets in April of 2022, making it much more challenging for consumers to move money from their bank-accounts to their crypto-currency wallets.
Some crypto-currency investors are concerned that a blanket ban for instance in China or Egypt, may be implemented in the future, while others regard these laws as tactics to discourage individuals from investing in crypto-currencies.
It’s not only India; because of their connections to the dark net and other illegal online activity, several other nations have implemented severe controls on crypto-currency transactions. The EU has announced new regulations that would track and identify transactions of crypto assets in order to stop money laundering, terrorist funding, and other crimes.
Conclusion
Long-term investors may expect Bitcoin returns to remain positive as there has never been a consistent 4-year holding period with negative returns. As Bitcoin is the king of all the other tokens, we may anticipate an improvement in the market environment if Bitcoin finds itself in more favorable circumstances.
Reference:
PES. 2019. 190 Million gone forever a nightmare for crypto-currency investors. Online Available at <https://www.professionalessayservice.co.uk/190-million-gone-forever-a-nightmare-for-cryptocurrency-investors/ > [Accessed on 23rd July 2022].
Al-Amri, R., Zakaria, N.H., Habbal, A. and Hassan, S., 2019. Cryptocurrency adoption: current stage, opportunities, and open challenges. International journal of advanced computer research, 9(44), pp.293-307.
