The market of cryptocurrency is just like any other investment market; ups and downs are a part of it. At this moment, investors are wary due to the tumbling situation of crypto. Industry experts are calling it ‘crypto winter.’ But this is not the first time crypto has gone through such a situation.
Crypto is considered volatile, and factors like inflation, higher interest rates, and the war in Ukraine have an influence on this market. Bitcoin has been reported to hit an all-time low of about 36% less than its value in December 2023, and other altcoins also seem to follow its path. The crypto market is a bit complicated compared to stocks, ETFs, mutual funds, etc., but having QUANTUM-AI-TRADING.COM by your side, you can always remain updated in the investment markets.
Will Crypto Be Able To Survive This Crash
This is not the first time crypto is facing a hard time. Back in 2017, Bitcoin shot up in its value. Within a year, its price rose from $1000 to $20,000. It began more popular and saw a meteoric rise. However, due to market manipulation by large investors a.k.a. crypto whale, the market crashed.
The crypto winter lasted for about four and a half months, and it exited the bear market phase in April 2019. Even after that, there wasn’t any momentum seen in cryptocurrency until later 2020 – amidst the pandemic.
But this isn’t the same scenario now. The largest crypto-mining countries – China and Russia have implemented stricter policies for energy-intensive mining in 2023. This happened at the same time that global inflation took off. Moreover, many countries started to increase interest rates in Bitcoin, Ethereum, and other cryptocurrencies.
Another reason is the crash of Terra. It was considered one of the safest and most stable cryptocurrencies, and its fall heavily influenced other currencies, too. As the Guardian reported, “Terra dropped from more than $50 billion to virtually worthless in a week.” This statement definitely raised concerns among investors.
However, as an investor, we cannot say that this is the end of crypto. It is run by blockchain and with new innovations like metaverse, NFT, and NFT gaming, crypto is likely to survive this crash.
Will The Prices Shoot Up After This Crypto Winter
Crypto does not have a long history like stocks so we can look at the figures and say what is going to happen after this crash. But we can take reference from the last bear market it has gone through.
Surviving through the winter phase does not necessarily mean that the market will be reaching its prior heights. It takes years. After the last crash, it took a year for crypto to see a consistent rise in the market. It was early 2023 when the prices reached the level of what it was in 2017.
Assuming this four-year cycle repeats again, we have to wait till 2025 or early 2026 to see the rise in Bitcoin or Ethereum or any other digital coin again. But this is also a good time to invest in cryptocurrencies. Unlike stocks, cryptos aren’t meant to be a long-term investment. But currencies like Ethereum, and especially Bitcoin, can be worth the wait.
Will Crypto Rise Up Again
Cryptocurrency is speculative, and this makes it different from other investments. There is a high possibility that it will stand back up, but that might come with a cost. Many penny cryptos or cryptocurrencies trading under $1 would likely cease to exist. This is because they are very volatile and might not withstand the current market crash.
On the other hand, ‘blue-chip’ cryptocurrencies or in other words, companies that are widely recognized will bounce back. This includes Bitcoin, Ethereum, Binance Coin, and Solana. Some of them already survived the 2018s bear market and are likely to survive this as well. These companies or currencies have a strong background and can withstand the storm. So, if you are planning to invest now, the mentioned cryptos are good to go.
How Long Will It Take To Recover
After learning all these, the question still arises how long will it take for crypto to recover? We could have already predicted if we had known the ebbs and flows of it. As reported by CNBC, Bitcoin is not going to have another bull run until 2024. This also indicates that other currencies will also follow the trajectory of Bitcoin.
However, Ethereum on the other side is playing its part in becoming the biggest cryptocurrency. Ethereum launched Ethereum 2.0 this year and experts have to say that this could bring an Ethereum bull run. The good news is that the hype around this newly launched Ethereum 2.0 can also influence the bull run of other currencies. And this can certainly revive the crypto market faster than we expect.
Is Crypto Still Safe To Invest
The world of cryptocurrency is pretty volatile, and because it is speculative, the risk is also very high. There is a high chance that many of the cryptocurrencies of today might not exist tomorrow, and looking at the current situation, many of them might not bounce back to what they were before.
Cryptos can give you substantial returns in a very short term. However, it can also go south. But if you are eager to invest, long-term investment in major currencies like Bitcoin and Ethereum will be a good choice.
Cryptos are going through an unfortunate time, and no one knows what the future holds. Predictions of industry experts say that the sector will pull through this weather, while many of the individual currencies will lose their existence. However, considering everything in the right direction, as an investor, you must do your research and calculate the risk of investing. And yes, it is safe to invest in crypto.