What Are The Main Reasons Behind The Downfall Of Cryptocurrencies in 2022?

[Good-Guy]

Bitcoin and many other huge cryptocurrencies were considered as one of the greatest investment assets. It has been a record that the price of Bitcoin and many other major cryptocurrencies have improved each year, but this is something that has not happened this year. Since the year 2021, the prices of cryptocurrencies have repeatedly fluctuated and the market never actually recovered yet. Last year, the price of Bitcoin was more than $57,000, but now it has fluctuated to more than $37,000 and this means that the conditions are not that favourable for many investors because Bitcoin risks getting fluctuated even more due to unfavorable market conditions and overall attitude of investors towards the cryptocurrency assets.

I think that there are many major factors like pandemic, wars, financial instability, increase in interest rates, etc that could be termed as the primary reasons why the market is dying in such a way. One of the other reasons why cryptocurrency market is suffering is because investors no longer have that same urge to invest in these assets. Moreover, the sad thing is that the conflict between Russia and Ukraine has not resolved and it seemed that Bitcoin will remain down until or unless the world starts having a positive attitude towards Bitcoin and other coins.

 

[Holicent]

Cryptocurrencies have been on a downward trend since the beginning of the year. This is because of a number of factors. Aside from the pandemic, there is a lack of trust in cryptocurrencies among consumers and investors. This is because some of the biggest cryptocurrencies have been hacked, causing millions of dollars worth of losses. For example, in October 2018, hackers stole $500 million worth of cryptocurrency from a Japanese exchange called Coincheck. In December 2018, hackers stole $40 million worth of cryptocurrency from an exchange called Binance. These high-profile hacks have caused many people to lose faith in cryptocurrencies as an investment vehicle and payment method.

Second, there are not enough businesses accepting cryptocurrencies as payment methods or using them as currencies for their transactions. This limits the usefulness of cryptocurrencies on a daily basis and makes them less attractive to both consumers and merchants who may be interested in using them as payment methods but are unable to find businesses willing to accept them as payment options at their stores or restaurants due to lack of demand from consumers who want these options available when buying goods or services from merchants who don't offer such options at all because they simply aren't interested enough yet due to lack

 

[Sotherefore]

I don't know if war has anything to do with the downfall of cryptocurrency in 2022 because it was ever since January of this year that all coins started dropping as if it was a plan event. Well I just believe that it is just a normal technical and fundamental analysis and how the crypto space was being programmed to be. I have an expert who predicts that the year will be full of market crash and then I did not believe it because I did not have much understanding about all these things.

Another reason I believe this to be a normal characteristics of cryptocurrency is because this has happened before in the past . There was a time which all cryptocurrency drop to a point that so many investors believe that all the coin can never recovered from its depreciation but at the end all coin were all rising and even more than what we expect. This crypto space is completely unpredictable.

 

[Ithedicious]

Cryptocurrency will not be able to give you what you predicted , that is what I have come to understand ever since I came to understand about the existence of cryptocurrency and it function .

well whatever the case may be , the downfall of cryptocurrency came as a surprise to me because this is just the first time I have come to understand that cryptocurrency can drop so much like this , even though I have researched and I was able to confirm that this has happened in the past before.

I still have so many things to understand about the existence of cryptocurrency , maybe at time goes on I will know the main purpose is this downfall. I really thank God I did not invest then when I have the urge to invest because by now all my coins could have been in a very serious depreciation. There are so many things I have not learnt about this cryptocurrency.

 

[Melanie Terrell]

Financial experts believe that the cryptocurrencies are falling because the US government is trying to combat inflation and stabilise the markets. As a result of this, interest rates have been increasing.

 

[cashisking149]

Inflation and risk of recession being very real now is causing a risk off mentality in investors. It's not like the crypto market is down but the stock market pumping away is it? People are now acutely aware of how much money they have and want to use it very wisely and for many that means holding off on going in on crypto and for those in, it means topping up with any profits they have acquired.

 

[anil02]

Crypto is base less currency and till it is not legal tender money of most of countries. Only some peoples are playing game and it is normal thing that one day it will crashed and now it is happen.

 

[coin456]

Some of the reasons i consider would be the recovery from the pandemic. During pandemic when people did not have money the Feds had lowered the interest rates so that people could borrow money and keep the stock market afloat. This means that when people had more money to spend that gave a increase the demand for good and services. When there is more demand less supply it gave rise to inflation. The last two years countries have witnessed highest inflation records. High inflations means less value of the US Dollar and hence people started investing in alternative assets like gold/silver and cryptos. Now since the interest rates have increased , the US Dollar has more value now thus less demand for assets like gold and crypto and hence a drop in the value of the assets.

 

[anil02]

It may be right that during pandemic peoples prefer crypto to earn more and now situation in control so peoples choice is changed they are investing in other mode. We can earn crypto at some site and I think it is right time to earn crypto at sites.

 

[CoinMany6]

The macroeconomic conditions and severe crypto events strongly impact crypto price trends. These factors could be the Russo-Ukrainian War, high-interest rates raised by US Federal Reserve, etc. All these affect cryptocurrency trends negatively. Crypto whales heavily selling assets is a sign of market turbulence and will bring panic to crypto markets. Other big events in crypto are the LUNA crash and the FTX collapse. LUNA viewed as an algorithm stablecoin ends up vanishing with a value close to zero. It also arouses some investors’ questions about whether stablecoins are stable. Investors may lose confidence in cryptocurrencies and sell out to avoid risky loss of wealth. Why does it happen like this? Crypto markets highly depend on investors’ faith and confidence. So it’s much more volatile when negative events occur in crypto than usual.

 

[roseberry]

crypto is a kind of currency and it is still not legal money in most of the countries . It is expected to crash and the crash is expected to happen soon.

 

[ArsysX]

Main reason is lack of some kind of regulations and greed of some people. Stock market was the same at the beginning, it took years of regulations and years of loss for some ppl. Time will resolve all

 

[Shaf]

The cryptocurrency market is going down simply because it was time for that to happen. Markets have phases they go through every cycle, and after every bull run comes a bear market. We had a long period where prices went wild, pumping without limits sometimes. Whatever goes up, will surely come down soon enough.

There were catalysts for the downtrend, like the fall of Luna, the war between Russia and Ukraine, the worsening macroeconomic conditions worldwide after COVID were all factors that increased the speed at which it happened. This and many other unforeseen events will continue to fuel the downtrend and disinterest in the crypto market.

The downfall of FTX just made a bad situation worse and investors are loosing confidence in the entire cryptocurrency market, not just specific projects.

This is the time to learn, plan and DCA into the strongest projects while waiting for the bull again. It's common that the bull starts after the Bitcoin halving which is expected to happen in 2024.