Skip to main content

Crash on the crypto market - opportunities and risks in the current market situation

 

The correction of the last few weeks, which was primarily due to rising interest rates, turned into a crash of enormous proportions yesterday. After a 7-day crash of almost 25%, Bitcoin is now below the psychologically important $30,000 mark. Ethereum also lost 30% in value. Terra's Luna token lost 99% of its value after losing its dollar peg and falling below $0.30. The token, which hit its all-time high at $116, is currently worth one cent.



Reasons for the crypto crash

Apart from Terra, the reason for the price losses is the US Federal Reserve's 50 basis point hike in interest rates. Higher interest rates make risky assets less attractive. A sale takes place. Cryptocurrencies are commonly considered to be one of the riskiest asset classes. Due to rising interest rates, cryptocurrencies are particularly under pressure to sell. In addition to the interest rate hikes (which have been around for some time), cryptos came under pressure, especially from Terra. Due to circumstances that have not yet been clarified, the stablecoin Luna lost its dollar peg and lost almost its entire value within a very short time. A massive loss of confidence for the entire industry, which alone in the form of the Terra token destroyed $13 billion in market capitalization.

Such a negative mood on the market amplifies the effects and the sell-off spirals.


Even if the rate hikes have been fixed for some time, not all risks are necessarily priced into the prices at the moment. The market is currently fearing further rate hikes by the FED. This would make the “crypto” investment case even less attractive.

Furthermore, young tokens and projects in particular live from trust - once this trust, as in the case of Terra, is destroyed, the entire industry loses credibility. In particular, future visions such as DeFi are then called into question. In addition, such price fluctuations make the market more skeptical.



opportunities

Where there are high risks, there are usually also high opportunities. Many cryptocurrency and tokens are currently priced lower than ever - often below the ICO price. This allows you to pick up huge bargains. In particular, promising projects such as Fantom or Avalanche are currently cheaper than ever. The top dogs Bitcoin and Ethereum are also well below their all-time highs. If you want to act anti-cyclically, you could get in now.


In addition, the projects live on. If you invested in Ethereum because you believe in blockchain, smart contracts, NFT and all the other innovations, then the investment case is the same. The blockchain is the same. Developers are still working to push your tokens and projects or blockchains. Only the price has changed. It is now up to you to determine whether only the price has changed or whether the value has changed as well.


In times of crisis, tomorrow's winners are formed. Not every project and every token will survive due to the outflow of funds. According to Darwin, in nature only the strong will survive - it's the same in the crypto market. It is sifted out. Which project is really promising, future-oriented and offers opportunities? Or which project is just a copy, a fun token or something similar? Those who invest in the winners now can benefit twice over later because the competition has been screened out.


Should I Buy Cryptos Now?

The market currently harbors high risks. Rising interest rates, lost confidence and flagging interest could weigh on the industry over the long term. On the other hand, there is the opportunity to invest in the technology of tomorrow - at prices that have rarely been seen. It is important to find out what intrinsic value you get for what price. Buy future-oriented, promising projects.

My Top Picks
Honeygain - Passive earner that pays in BTC or PayPal
MandalaExchange -The Best no KYC crypto Exchange! 
BetFury - Play And Earn BFG for daily Bitcoin and ETH dividends!
Pipeflare - Faucet that pays in ZCash and Matic, Games pay in DAI
Womplay - Mobile dApp gaming platform that rewards in EOS and Bitcoin
Cointiply - The #1 Crypto Earning Site
Torum - Join the latest Social Network and earn TRM for Free! 
LiteCoinPay - The #1 FaucetPay earner for Litecoin 
LBRY/Odysee - YouTube Alternative that lets you earn Money by viewing videos!
FaucetPay - The #1 Microwallet Platform
FREEBTC - The #1 FaucetPay earner for Satoshi's
FaucetCrypto - An earning/faucet site that pays out instantly
FireFaucet - An earning site that pays better for some than Cointiply
DogeFaucet - Dogecoin Faucet
xFaucet - BTC, ETH, LTC, Doge, Dash, Tron, DGB, BCH, BNB, ZEC, FEY - Claim every 5 minutes
Konstantinova - BTC, ETH, LTC, Doge, Dash, Tron, DGB, BNB, ZEC, USDT, FEY, 25 Claims Daily

Comments

Post a Comment

Popular posts from this blog

The 5 largest platforms for non-fungible token (NFT) collectibles

  Since the beginning of 2021, non-fungible tokens (NFT) have had no holding back and the sector is setting new records almost every day.  More and more artists, stars and brands are realizing the potential - NFT are well on their way to catapulting the crypto space into the mainstream.  But which collectibles are currently the most popular? What are NFT? NFT are unique tokens that cannot be exchanged one-for-one for an equivalent token.  Any asset that is tokenizable can be an NFT.  This includes, for example, (digital) works of art, trading cards, game items and crypto domains.  Theoretically, however, real estate or securities can also be mapped as NFT. NFTs can be used to transparently map ownership structures on a public blockchain.  This allows them to store value just like real objects, even if additional copies are easy to make.  For example, the original picture of the Mona Lisa is significantly more valuable than a photo, as everyone kno...
11 comments
Read more

CARDALONIA: THE CARDANO METAVERSE OPENS THE GATES!

  Have you ever been to Cardalonia? With these words, the Cardano Metaverse called Cardalonia starts the gates. In this 3D world, developers and users can interact with each other. First of all, users have to create an individual character with which they can move online. After that you can enter one of the worlds built by developers with this character. You can also purchase your own land in the Cardano Metaverse via the marketplaces in Cardalonia . This is secured by Cardano's blockchain technology and therefore offers a relatively secure transfer of ownership. Since these are only digital plots of land, it is not yet entirely clear when the plots of land are purchased whether they can also be sold again in the future. A possible profit cannot be estimated at the moment. In Cardalonia, the cryptocurrency Lonia is used. The maximum amount of tokens in circulation is 100,000,000. The team consists of Alice Sand (Co-Founder), Vasil Air (CTO) and Dustan Water (Fullstack Developer). T...
Post a Comment
Read more

Cardano: This is the vision that founder Charles Hoskinson has

  The Altcoin Cardano has tended to decline in recent weeks.  The Alonzo upgrade was supposed to bring improvements, but it soon turned out to be a disappointment.  Cardano founder Charles Hoskinson presented his vision for the cyber motto in a live Twitter video. • Cardano in the last few months under pressure • Charles Hoskinson explains his Cardano vision via Twitter • Security and privacy at the center The cryptocurrency  Cardano  has had a difficult few months.  While founder Charles Hoskinson's cyber motto has had a strong run in 2021, it has been steadily downhill in recent months.  Cardano is faced with some difficulties.  The so-called Alonzo upgrade went live in mid-September, for which crypto fans had high hopes, but which soon turned out to be a disappointment.  The upgrade should make it possible to use smart contracts on the cryptocurrency as well.  It soon turned out, however, that although these were entered into Cardano,...
Post a Comment
Read more