When it comes to investments, especially with crypto, you must know when is the right time to sell or hold on to your coins. With the massive market crash in the crypto world recently, many investors are still holding out and hoping for a recovery in the market.
Just this month, Bitcoin’s price fell below $21,000 as the US GDP report revealed that they are experiencing negative economic growth in the second quarter of the year.
Long-time investors in the crypto market are aware of the price volatility and remain unfazed by the crypto crash. However, medium and short-term investors are grappling with the stock price plunge and are starting to sell their assets as soon as they can.
But how bad really is the cryptocurrency market crash this year?
Here is everything you need to know about the recent trends in the crypto market.
The 2022 Crypto Market Crash
One of the companies that took the greatest loss this year is Coinbase.
Being the first publicly traded crypto platform in the U.S. market last 2021, its stock price plummeted more than 81% in the first quarter of 2022 because of less activity in crypto trading paired with the falling value of cryptocurrencies.
Coinbase reported that they had acquired over $430 million worth of loss in the first quarter of the year, and even Wall Street is expecting the prices of Coinbase to plunge even deeper.
One of the reasons for the crash of Coinbase was the overspending and overhiring of staff, which made the cost of growth a bit too risky for a new company.
Other cryptocurrencies, such as Bitcoin, Ethereum, and even Musk’s beloved Dogecoin, have also suffered a plunge in prices during the first quarter of the year.
Experts and Columnists say that this crypto market crash differs from the rest and can lead to real losses for the investors.
The value of Bitcoin fell by roughly 58% in the first half of the year because of worldwide inflation and the benchmarking of the lending rate by the Federal Reserve.
Risky assets will surely be treading dangerous waters in the months to come.
Another reason for the crypto market crash is the fall of retail trades due to the emergence of many competitions in the crypto space.
Along with the rising inflation and the higher costs of everyday items, many investors have pulled out of their stocks, especially in risky markets such as cryptocurrency trading.
Will The Crypto Market Still Recover?
The surge in the prices of cryptocurrency in 2020 was due to the economic shutdown brought upon by the pandemic. This made the cryptocurrency frenzy gain more popularity among the masses.
But now that the economy is starting to open up again, most countries suffer from high inflation rates due to excessive demands and disruptions in supply distribution.
Since many crypto enthusiasts consider cryptocurrency the digital substitute for physical assets, it is no surprise that the devaluation of the US dollar is also the devaluation of crypto coins.
There are also those who remain optimistic and believe that this crypto market crash is yet another one of the mini-bear market trends in a super cycle. In 2018, the price of Bitcoin fell by 80% but eventually recovered, even reaching a new ATH.
However, experts have highlighted the factors that make this market crash different from the rest. Factors such as wars and the pandemic greatly affect the economy, and this includes digital and physical assets by businessmen and civilians alike.