cryptocurrency

2022 might be the worst year for the cryptocurrency market so far…Here are the reasons!

 

The year 2022 began with many promises and hopes from cryptocurrency investors that Bitcoin would set new records, but…

 

Six months later, a dramatic shift occurred, and a beautiful fairy tale became a bleak nightmare.

 

Market turnaround:

By the end of 2021, cryptocurrency prices were surfing to all-time highs with the total market value reaching the $3 trillion mark.

 

Bitcoin touched $68,000 and enthusiasts made brave predictions that the asset would break through the $100,000 level during the first two quarters of 2022.

 

2022 passed but expectations were not fulfilled.

 

Instead, the industry rocked one serious decline after another and reaped a significant portion of the value of cryptocurrencies.

 

Non-fungible tokens (NFTs) were the first to be targeted after OpenSea, the largest market for NFTs, was breached due to bugs and vulnerabilities, resulting in the loss of many non-fungible digital parts.

 

Since then, NFT transaction volumes have dropped by more than half from their peak in 2021, prompting critics to question whether the bubble has burst.

 

According to a recent DEXterlabs survey, more than half of NFT investors have yet to profit from their investment.

 

When the algorithmic stablecoin TerraUSD (UST) decoupled from the dollar, things got even worse.

 

The aftermath was chaotic, with investors losing billions of dollars and the entire Terra ecosystem collapsing under the weight of the tragedy.

 

Regulators conducted investigations to uncover a significant amount of neglect that threatened to bring the entire industry into conflict with regulators.

 

The Terra disaster pushed prices even higher, but just as investors thought the crypto winter was coming to an end, Celsius broke the camel’s back by announcing that it was temporarily suspending all withdrawals due to harsh market conditions.

After the announcement, Bitcoin plunged to an 18-month low of $18,000, and the cryptocurrency market cap fell below $1 trillion.

 

Could the second half of 2022 change things?

At the moment, experts are divided on whether things will improve in the second half of 2022.

 

For pessimists, there is little evidence that things will worsen, most notably Ethereum’s delay in permanently switching to Ethereum 2.0 and the abandonment of mining in favor of quotas.

 

In the same vein, « Kavita Gupta » of the « Delta » company believes that the decline has yet to occur, stating:

I am convinced that we have not yet reached rock bottom.

I believe $14,000 to $16,000 is the ideal bottom.

 

Others, such as Guggenheim’s Scott Minerd, forecast an $8,000 drop-in bitcoin’s value, while Peter Schiff advised investors not to buy the dip.

Although the outlook for the entire industry may appear bleak at the moment, optimists are banking on regulations to provide a clearer framework for the industry.

Gamers have praised a recent bill introduced by Cynthia Loomis and Kirsten Gillibrand, and the SEC’s approval of a bitcoin ETF could be a catalyst for reversing trends.