Whether you are a virtual currency investor or not, in 2022, I am sure you have heard a lot of news about the currency circle. As of July 2022, the market value of cryptocurrencies has shrunk by more than 50% compared to 2021. The largest cryptocurrency, bitcoin, fell more than 70 percent, while the smaller coin, ether, also fell to $1,583.
Why will Bitcoin plummet in 2022? Is the currency circle still worth investing in? Today's article will reveal the reasons for the sharp decline of Bitcoin for investors and share our views and investment advice on Bitcoin, Ethereum and many virtual currencies.
Why is Bitcoin crashing?
2022 has been a painful year for Bitcoin investors. According to Google Finance data, the bitcoin price has been hovering around $2,000 in July, and even fell below $20,000 on July 1, with a record low of $19,224.
Year-on-year in July 2021, the price of Bitcoin is as high as $40,000. In other words, Bitcoin investors lost more than 50% in one year.
Although we understand that many major events will take place in 2022, such as the Uzbek-Soviet war, inflation, and the collapse of the stock market, what is causing Bitcoin to shrink significantly this year?
- Reason 1: The Fed is raising interest rates
Between 2022 and 2021, the government has revitalized sluggish financial markets by handing out relief payments and implementing low interest rates, making it easier for more consumers and businesses to spend and borrow. A lot of money roams the market, naturally flowing into risky assets like stocks and cryptocurrencies. But in 2022, the Fed has been raising interest rates by raising interest rates to address high inflation. It was this tight monetary policy and slowing economy that punctured the cryptocurrency market boom.
- Reason 2: The panic among Bitcoin investors
It goes without saying that the collapse of Luna coin and its related “stablecoin” Terra coin (a virtual currency pegged to U.S. dollar assets) in May this year wiped out billions of dollars. This greatly aroused the panic of investors in the currency circle. The main source of value of Bitcoin is the trust of the holders. When there is a huge gap between natural selling and buying, and the market lacks liquidity, the collapse of the Bitcoin price is inevitable.
- Reason 3: The Exit of Opinion Leaders
Crypto advocates and key influencers can tweet and cause capital inflows, and we’ve clearly seen this happen with Elon Musk’s support for Dogecoin. The latest report shows that Tesla sold 3/4 of its bitcoins in a quarter, which is undoubtedly a strong reason for the collapse of bitcoin prices.
Will Bitcoin fall to $0?
In Dcard's Bitcoin discussion board, a large number of investors have been discussing how much Bitcoin will fall to $0, and some even think that Bitcoin will fall to $0. But expert bodies say the value of cryptocurrencies can fluctuate wildly based on market speculation, but the value will never fall below zero because it is a hard money supply.
It is undeniable that Bitcoin has fallen 70% since its peak of $69,000 in November 2021, but Bitcoin still maintains its payment and financial value, if you do not understand what Bitcoin is worth, you can take a look at our An exposition of the value of Bitcoin published between.
Will Bitcoin bounce back?
There is no 100% guarantee on investment, but we believe that when Bitcoin falls, it may rise again. Bitcoin appears to have begun to halt its downtrend in July, which, combined with other positive economic indicators that could point to a slow bear market turn, could suggest a crypto recovery is on the horizon.
But when will Bitcoin bounce back? We can't give more predictions, but we can be sure that with the end of this crypto winter, it is likely that many coins will cease to exist, such as Luna coin. And so-called "quality" cryptocurrencies, including bitcoin, are more likely to weather the storm and generate long-term returns over time.
Is Bitcoin still worth investing in?
Is Bitcoin a good investment product? We believe that cryptocurrencies such as Bitcoin have historically had little correlation with price action in the U.S. stock market, and owning some cryptocurrencies can increase portfolio diversification.
However, for investors who want to make money by investing in Bitcoin, we do not recommend using the heavy asset All in Bitcoin for long-term investment in 2022. On the contrary, due to the short-term volatility of the Bitcoin market, we think it will be very volatile. Suitable for investors to make short-term investments.
At present, the short-term investment in bitcoin mainly includes bitcoin futures and bitcoin CFDs. No matter whether bitcoin rises or falls in the market, investors have the opportunity to make money, which is undoubtedly more flexible than bitcoin spot.
Invest in Bitcoin and Ethereum on CM Trade
If you want to invest in Bitcoin in the short-term, we recommend that you use CM Trade for investment. Whether it is bullish or falling, you can buy CFDs on CM Trade for two-way trading. Currently, CM Trade supports CFDs on Bitcoin and Ethereum. The open lot size is only 0.01 lot, and the leverage of 1:10 times can be used.
On CM Trade, we provide an intuitive and user-friendly interface, and provide one-click pending orders, trading calendars, and trading strategies, which can help investors better judge market trends and trade.
In the past, CM Trade has timely reported some events that triggered the price crash of Bitcoin, and accurately predicted the general market trend of Bitcoin under the influence of events, including: hostile regulatory actions by major countries (for example, “China bans Bitcoin ”, SEC crackdown on ICOs), prominent developers exiting Bitcoin development teams, risks resulting from hard forks (e.g., Bitcoin forking into Bitcoin Cash), etc.
This information has helped investors to buy and sell short contracts in time before Bitcoin plummeted, thereby making profits. If you want to get first-hand market information and not miss any trading opportunity, then you can register as a CM Trade member for free. Just follow these four steps to successfully start trading on CM Trade.
We believe that the Bitcoin market will not collapse, although the price volatility of the Bitcoin market still exists. A truly successful investor will seize all market opportunities and see the opportunities when the price of Bitcoin plummets. We believe that with the assistance of the CM Trade trading platform, you will be able to understand the market more clearly and make accurate investments at the same time. decision making.