The cost of crypto could be impacted by interest rates, inflation along with other macroeconomic variables which can impact just how confident individuals are in putting their money in unsafe substitute assets. With soaring interest rates, individuals are searching for much better returns on savings accounts, and this could be simply because individuals think more at ease with accounts. So, if you are planning to trade or mine Bitcoin, then you may visit the Official site .
When costs drop even more, as is going to take place in the spring of 2022, it’ll elevate the strain on the marketplace by placing several investors under pressure to free up dollars to satisfy their other responsibilities. State actions all over the globe might also result in investor pessimism and result in crypto crashing. It has been a great year for cryptocurrencies as their total value has increased by $2.14 trillion. Can the value of bitcoin be zero? There’s nothing in this world which can never have the value of zero. Though the chance of dropping the value of bitcoin to zero is 0.000001%. However, there have been several predictions that the coming year might not be in the favour of cryptocurrencies because of the following reasons:
- Dynamic nature of crypto markets: Cryptocurrency markets are dynamic and face several ups and downs. There have been great upward trends in crypto in recent years but the thing that should be considered too is that there have been many downward swings too. We have seen many cryptocurrencies that have provided up to 24000% to 462,000% gain in a short period but later faced a decline in their value. Litecoin and Nano are their prime examples.
- Investors get excited about investing in bitcoin: Investors get over-excited about investing in bitcoins and start making high expectations from the technology of blockchain. Investors over expect the adoption of blockchain technology. It takes time to adopt any technology and there’s no guarantee that the technology will be successfully adopted or not. People get over-excited with the new technologies such as the technology of the internet, B2B, 3D printing, etc.
- The inability of the bitcoin to decouple: the inability of the bitcoin to decouple is considered as one of the main reasons that suggest the crash of crypto in 2022. Cryptocurrency is a technical asset and works on its own independently. Bitcoin has a limited supply that is only 21 million. Some investors compare bitcoin with gold and consider it a risk-free asset but it’s not like this. Whenever the market crashes there’s also a drop in the value of bitcoin. There have been many clues increasing day by day that suggests the crash of crypto in 2022.
- Meme coins lose their shine: People out of FOMO (fear of missing out) invested huge funds in crypto without thinking twice. The Japanese coin such as Shiba was exaggerated through social media and gained up to 45,000,000%. Dogecoin and Floki were also overhyped and gained up to 3,119% and 2,763%. Shiba is one of the coins that is most searched over the internet in the current year, but this exaggeration on social media doesn’t improve their long-term suitability. Recently the award-winning team of analysers launched a list of 10 stocks that should be invested and Shiba wasn’t included in it.
- Rules and regulations regarding crypto: china has announced the ban on cryptocurrencies which forced the investors to withdraw their money from them resulting in a decrease in the value of bitcoin.
- Security breach in crypto: There has been a number of hacks and scams in crypto which creates a fear in the mind of investors and compels them to withdraw their money.