The big dip hit the cryptocurrency market in May 2022, sceptics and fans alike are speculating if we are now entering a bear or bull market. Recent events in the crypto market have seen many investors lose millions if not billions as the cryptocurrency market took a huge hit during April and May this year. 2021 saw a major bull run as investors commercial and private alike bought into the cryptocurrency market however, 2022 has seen a sharp reversal of the “all time high” (ath) prices seen in November 2021. Some cryptocurrencies like Terra (Luna) saw its price fall by 99.99%. It was so bad that they forked the cryptocurrency to make necessary adjustments to a cryptocurrency promising advancement in Decentralized finance. Also, from the same team TerraClassicUSD (UST) a cryptocurrency that gave the illusion of being a stablecoin fell from being pegged to the dollar with a price of $.99 to being $0.07 within a week. Many experts, investors, journalists, and youtubers cite cryptocurrencies as officially entering into a bear market. Giving the following reasons for the crash:
> China banning cryptocurrency in 2021 in phases prohibiting transactions in May, banning all crypto mining in June and outlawing cryptos outright in September.
> The US government increasing interest rates in May 2022 so investors went back to traditional assets.
> Inflation of worldwide currencies and dips in the stock markets as a knock-on affect of government’s measures to ease the economic pressure during Covid-19 and lockdowns.
> Institutions easing off investments in Cryptocurrencies after investing heavily in 2021 as the various dips showed the high risk volatility of the market.
> The fragility of a market that is heavily manipulated by investors using leveraging, along with the use of bots for trading.
Sceptics are saying we are entering a bear market where the price could decrease or go sideways until the next Bitcoin halving in 2024, which helped trigger the last run and the dominance of Bitcoin is such that when it moves everything else moves with it.
Cryptocurrency Bear Market: This Bitcoin Crash Is Different From the Past – Bloomberg
Others say that the market is much more open than ever before and less influenced by Bitcoin than it has ever previously been. Furthermore, Ethereum’s recent announcement of the much-anticipated move to Ethereum 2.0 changing the way it’s mined from Proof-of-Work to Proof-of-Stake could be the catalyst for a surge in the prices of cryptocurrencies, thousands of which run off the Ethereum network. More information about this announcement is on:
What Does Ethereum’s Move to Proof of Stake Mean for Its Price? (businessinsider.com)
Ethereum Merge Date Set for August 2022 Buterin Confirms (business2community.com)
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