The crypto industry has lost almost US$1 trillion in market cap over the last three months. The effect was so severe that prominent cryptocurrencies such as Bitcoin and Ethereum have lost nearly half of their worth since their all-time highs.
Some analysts believe that cryptocurrencies will not exist in the foreseeable future. This has ultimately sparked investor fear of a looming ‘crypto winter.’ So, where is this all going? Is it true that cryptocurrency will be gone by 2022?
Bitcoin has dropped around US$32,000 in recent weeks, from a peak of US$69,000 in November 2021. Other popular cryptos have also seen their prices plummet dramatically. The cryptocurrency industry’s repeated losses have discouraged key attempts such as corporate investments, established regulations, and easy-to-trade models. The decentralized sector is currently in ruins.
Even though several causes are adding to the current situation, no one can take accountability or do anything to get the industry back on track. ‘Crypto winter’ concerns on the side lines tormented investors. Crypto winter, which is often connected with the Bitcoin market decline between late 2017 and late 2018, speaks of a lengthy bearish market in which cryptocurrencies fall continuously over several months. ‘
During the previous crypto winter, Bitcoin’s price dropped by more than 84 percent, and the bulk of altcoins followed suit. Whereas the price drop is not as severe right now, crypto investors are concerned that it will be if the prices of Bitcoin and Ethereum continue to decrease.
Bitcoin Indication of Recovery
Even though Bitcoin started 2022 on a sour note, investors appeared to be upbeat. People informed long-term BTC investors that volatility and negative trends are typical in the cryptocurrency industry. Nevertheless, Bitcoin’s price appeared to be on a comeback trajectory at the start of February, giving investors hope.
When Bitcoin’s price reached the $45,000 mark, investors believed that their long wait was nearing its end and that the world’s most valuable crypto will hit the $100,000 mark before the conclusion of the year. However, Bitcoin breached the $32,000 resistance mark dashed their optimism. Furthermore, the price does not appear to be stabilizing or finding a base to settle on.
Ethereum Follows Bitcoin’s Crypto bearish Path
Ethereum’s value fell under US$3,000 on Thursday and is now moving towards the long-held US$2,800 threshold. On January 24, Ethereum’s value fell below $2,200 for the first time since July 20, 2021. After reaching a high of $4,100 in December, Ethereum has struggled to find a stable price. Nevertheless, analysts continue to advise investors to disregard the highs and lows because they may only be a passing fad.
Current Price Drop
A slew of factors is influencing the volatile cryptocurrency market. One of them is the abrupt withdrawal of Bitcoin from previous wallets. Investors are unsure whether this means that there will be selling significant amounts of Bitcoin from these wallets soon. Additionally, the Federal Reserve has decided to raise interest rates. Several nations gradually strengthened or enforced harsh rules on cryptocurrency trading. Some countries, such as India, have levied taxes on cryptocurrency gains.
Future of Crypto
The financial sector will unlikely phase-out crypto soon. Although cryptocurrencies are volatile, the underpinning blockchain technology is all the rage. Furthermore, additional revolutionary concepts supported by blockchain technology, such as decentralized applications, NFTs, smart contracts, and so on, have recently featured prominently. As a result, cryptocurrencies have very little chance of disappearing this decade.
