No one ever imagined that after reaching all-time highs, Bitcoin could fall in the constant way it has during 2022.
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Since going through a health crisis due to Covid 19, where the financial markets were affected to the point of entering a so-called recession for more than a month and a half, the balance points between supply and demand were null.
After the issuance of money by central banks as a boost to the economy and support to all those income was affected by the pandemic, they began to invest, and decentralized finance resurfaced, which increased the value of Bitcoin and changed the market trend.
Although the crypto market has gone through various phases, it has never been extended for such a long period; the worst thing is that it does not stop reducing the prices of the different crypto projects.
Is massive volatility coming?
The digital financial sector is constantly struggling to stay at a low level. However, it is stuck there without being able to go down further.
There are some elements to evaluate before considering that the volatility or risks in crypto investments could experience an increase that could drive more than one investor of these digital assets crazy.
Investors, business people, and market analysts gather their opinions on the fact that the market situation that is currently being observed is the result of many decentralized companies that, with excessive leverage, have hindered the development of cryptocurrencies.
These opinions show that a series of contexts revolve around the digital financial market that affects the fulfillment of its main objectives as financial instruments.
Bitcoin and some of the significant crypto projects after it may decline in value, seeking a market stabilization phase where regulations and actions taken by the Fed play a key role.
Calm always returns after the storm; perhaps there has been a lot of financial pain in this downward phase; what is not known is if when it ends, those who decided to get rid of their digital assets may feel more pain when seeing what they could win.
Regulations play a crucial role.
After the massive adoption of cryptocurrencies as a haven instrument by various sectors of society, from individuals, large, medium, and small corporations, and even entire countries, they have generated in financial entities such as Central Banks the need to limit the transactions.
The need to obtain benefits from this market without disclosing the real intentions has led Europe and the United States to begin creating bills that regulate cryptographic operations and exchange platforms.
Among the aspects that these entities suggest digital currencies should have to be considered in the traditional financial system are the following:
- Safe and stable
- That allows the control of transaction data
- Ability to adapt to the traditional market
Elements that could be summed up in the total control of what decentralized currencies represent. Many have not sat down to evaluate that instead of merging two systems, they are trying to impose the traditional system on a possibility that could mean the future economy.
A crypto renaissance
The market capitalization that Bitcoin has reached is the highest and is not negligible, which suggests that we could be facing a new financial era; this and more information can be found in Bitcoin-Prime trading system.
Over time, decentralized finance represented by digital currencies and the blockchain is being updated with firm steps, which bothers many and benefits others.
In the face of convulsed economies, cryptocurrencies have left their mark, something that perhaps many could refuse to adopt, but it is not something impossible.
With all the circumstances and effects that the crypto market is throwing during this first half of 2022, it shows that improvements are yet to come, and of course, it will be in the foundations of the Blockchain.
Many of those involved in the financial market usually indicate that Bitcoin could disappear from the market, something that, until now, not even the most reluctant specialists to the idea of cryptocurrencies have given an opinion.
Cryptocurrencies could be going through a transition phase that could bring about essential changes not only in the crypto ecosystem but also in the world financial system and the entities that control it.