IS CRYPTO STILL A BIG THING?
Cryptocurrency, a form of virtual currency created using encrypted algorithms has been on a boom lately, and hasn’t failed to attract many potential investors. Many experts had earlier also viewed that the times are not far off when people will be able to use their crypto investments for their day-to-day transactions.
However, the question here is that as per the latest trends recorded, is it still a big thing?
Latest trends in 2022
Investors all around the world, were impressed by the skyrocketing figures of various cryptos including Bitcoin, Ethereum, Doge, and much more since 2017 but this year lately, the market performance outturned the expectations of investors globally.
The coin market has collapsed to $860 billion until now.
Reasons for the crypto crash
The downfall of the market recorded can be owed to reasons like
- Rise in the interest rates as announced by the US Federal Reserve came out as an indicator of upcoming recession.
- Following this, a downtrend was observed in the equity market which eventually reflected its implications in the coin market as well.
- Another factor leading to plunged cryptocurrency was a major sell off that happened after Celsius Network freezed the transactions owing to market extremities.
- After El Salvador, there are other countries in the list too, to legalize cryptocurrency while India is yet to take a call on crypto bill. Many potential investors in India might take aback their plans after the government put crypto earnings under 30% tax slab.
- Back in January 2022, the Russian Central Bank proposed ban on using and mining of cryptocurrency on account of financial instability and threat to its sovereign monetary policy.
What do experts have to say about future of crypto?
Although, predictions related to future of crypto might not yield practical results in the long term, a few things that experts have to say are:
- Regulation of cryptocurrency: A regulated coin market might inflict positive outcomes in terms of volatile nature of the market and bring a sense of security among investors seeking a long-term growth.
- Increasing adoption by institutions: A good number of companies were reportedly found to take an interest in the new virtual currency as they themselves invested and also, expressed their willingness to accept the crypto as a medium of exchange.
- Limiting the portion in their portfolio: Many experts have suggested that to keep the proportion of crypto assets limited to 5% in the portfolio where two largest cryptocurrencies i.e., Bitcoin and Ethereum can be a good choice.
- Only invest if prepared to lose: The maestros advise not to put crypto investments over the financial goals like repayment of debts and savings. Invest a portion as much as that if lost, does not bring harsh negative outcomes on your finances.
To conclude, not much basis is available to evaluate the future performance of the crypto market, it is still a riskier instrument and people expecting a good yield of earnings may confine their investments to conventional instruments.