Bitcoin has remained on the top investment list for every new and existing investor. Bitcoin is considered a highly volatile asset currently used by some countries to boost their economic backwardness. Every traditional and crypto investor witnessed the hike of bitcoin because the hype of bitcoin was so loud that no investor could ignore it. Due to bitcoins’ high volatility, some traditional investors are moving toward adding bitcoin to their investment portfolios and looking for pro Crypto trading tips. The new investors who entered the market just before the pandemic got four times the returns on their investment as from the gold.
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The prices fell as regular as the invasion started. The bitcoin prices are now down to about 50% of the last time’s high. Another global reason for the price fall is U.S. has increased the interest rates to strengthen U.S. dollar dominance in international markets. The dominance of the U.S. dollar is continuously decreasing because of bitcoin and the centralized digital currency launched by china to boost trade and replace fiat money in its domestic market. It can be a significant step taken by the U.S. government to simultaneously boost the economy and currency.
Reason for the price fall of bitcoin: –
Just after the hike in prices. Prices started to fall with a slow downward movement, or we can say bitcoin bottomed after some time of the hike. The bitcoin prices were trading around $25000 to $30000 before three months and substantial growth in June. After some time, bitcoin bottomed, and crypto lenders paused investors’ withdrawals. None of the customers can withdraw a high amount from the market. Celsius has paused the withdrawals and crypto transfers since June 12. Celsius is the most significant crypto lender, or we can say DeFi is decentralized finance. It has adopted some positive ways to pump crypto, but some of the (3AC) incidents took the crypto toward downfall. First was in between 16-18 June that a three arrow capital (3AC), a Singapore-based crypto fold fund, was insolvent. The second incident took place on June 27. Three arrows capital (3AC), a loan worth $350 million in the crypto asset, was compromised of USDC (USD COIN). The loan was issued to a three arrows capital from a voyager digital.
It created a disaster in the bitcoin fall, but the fall was not only in the bitcoin prices. The fall was seen in all other crypto coins.
A rough start to 2022: –
Bitcoin has a rough start in 2022 due to regular falling prices. Bitcoin has given about 65 to 70% returns on investment in 2021, but it was comparatively less if we compare the returns of 2020, which was around 300% during the lockdown. The investors started to pull their investments back as the bitcoin prices started falling. As the prices were at their peak and booked the profits, the investors are now in a risk-off mood, embracing and finding a safe investment in the most asset class. The investment can give a high return rather than stocks and is an alternative to store values investments. The downside in the bitcoin was that the liquidity was drying up in the crypto markets, which is an open question.
Bitcoin is a risky asset: –
Every investment carries a significant amount of risk, and the fluctuations in the prices up to a significant amount are known as volatility. Volatility is a standard course in the crypto market. Bitcoin, stocks, high-yield bonds, and other virtual currencies are hazardous assets because you can’t predict the prices of any asset. The prices can move up and down frequently within an hour or under any market condition.
The bitcoin was considered the store of value and a growing asset, but as the price is down, that is no longer the case. Can also use bitcoin to make payments, and overseas payments can be maintained well-using bitcoin. In addition, bitcoin investors have turned from risk-on to risk-off mode due to the fall in prices and want a safe and high return from any other volatile asset.
The market is now under the control of bears, and the fall in the bitcoin prices is more than 80%, and it is more than the fall in 2017-2018. But after that fall, many giants entered the crypto market, like PayPal and Fidelity, invested in bitcoin and entered the crypto game. So it is assumed that bitcoin will gain soon, and the prices can go sky-high again. Then, it can be silence before a storm.
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I am a crypto hobbyist, i offer Tips and Reviews on the best blockchain technology, crypto assets, emerging fintech trends, Country flags, banks virtual accounts, and the best Paying Legit Networks.
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