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Financial markets have ups and downs – it is all about the bears and bulls. Things are never bullish or bearish all the time. They alternate during different market timings. It is very important to understand that volatility is a good thing in the financial markets. Dollar cost averaging and taking gains often will avoid investor depression.
While the idea of passive income is advertised with cryptocurrency investing, there is lot of work to be done to make things work. Nothing is easy and everything comes at a price.
Major cryptocurrencies crashed anywhere from 15 to 40% over the past week. The overall market capitalization of the crypto market got wiped off.
Bitcoin fell by 50 percent in value since its peak. Altcoins like Solana, Cardano, Polkadot, and Near Protocol lost 2/3rds of their value in the process of trending volatility. The crypto market assassination is attributed to the fluctuations in the global financial markets and regulatory proposals from across the world.
What is the future of crypto? Will countries ban cryptocurrencies? What kind of regulatory controls can we expect? Should we continue investing in cryptocurrencies? These are just some of the questions in everyone’s mind right now as millions of investors continue to trade and invest in cryptocurrencies.
Recently, the Central Bank of Russia proposed a blanket ban on the use of mining and private cryptocurrencies. Biden management stated that they will be drafting a bill to regulate crypto assets.
Crypto was stable during the pandemic and brought an era of NFT and metaverse, NFT sales have soared recently and the volumes have touched nearly $25 billion.
This is not the first time Bitcoin has shown such a sharp decline. Interestingly, it is already rising back. During 2014, Bitcoin fell to $ 200 down 86 percent in value. During March 2020, when the pandemic was at its peak, it dropped from $ 9,000 to $ 4,500. In 2021, it was about $ 68,000
The down phase of the market is obviously scary. Lot of people are losing money. However, investors who lost money in the past have learnt their way around making money and they have mastered the art of booking profits.
Investors should think long and hard and avoid emotional decisions. Investors should learn to identify the fundamental strengths of the asset, avoid swaps during market volatility, avoid acting randomly.
Investors should evaluate the basics of an asset, avoiding foreign exchange in market volatility, avoid risk appetite factor, avoid acting on random trends. Those who have done their research about relative price trends would not have to worry about price fluctuations.
