The Fall of Bitcoin: When we talk about cryptocurrencies and Bitcoin, it is essential to know their performance globally since digital currencies represent a new financial perspective, here is the review to help you to understand crypto and bitcoin.
Without a doubt, this year, 2022, has not been the best year for Bitcoin since, with the constant declines that it has experienced, many of its users have preferred to stay out of cryptographic investments.
Panic is usually the main feeling that invades investors. In some cases, in fear of losing everything, they tend to sell their cryptocurrency units, which could be a terrible mistake.
Selling crypto assets is anticipating the scenario changing since the digital currencies that many of the users of Bitcoin and other cryptocurrencies currently possess have been acquired well in advance.
A price rally would not sound so illogical as long as Bitcoin and other cryptocurrencies recover steadily. To keep up to date with the latest information we recommend.
Key aspects that have influenced cryptocurrencies
First of all, we must be clear that we are facing a crypto winter that has been caused by the effects of the economy and the policies taken by the United States to control its inflation.
When analyzing the causes or the key points that have caused digital currencies to decrease in value, even some of which have practically gone bankrupt, we must focus globally from an economic and financial perspective.
Bitcoin was initially created to be used as an inflation control tool so that the world economy would have an additional strategy that could use digital currencies as financial instruments to reduce the emission of money and high inflation rates.
To date, few countries have joined this trend, but what is interesting is the support they have given to this concept of the digital financial market.
Some countries have even created their cryptocurrencies, known as stablecoins, which are anchored to the value of an asset such as the dollar or the country’s reserves.
The evolution of Bitcoin has been notorious and, at the same time, high since, in a period of 4 to 5 years, it managed to multiply its value from 1,000 dollars per unit to almost 68,000 dollars, values that no other traditional asset has been able to achieve independently.
The reality is that Bitcoin has had to fight hard to make its benefits known, although, for many, being volatile does not make them profitable.
In 2022 we have seen how digital currencies have fallen constantly month after month, to the point that they have hit unexpected lows, which has led many investors to divert their cryptographic capital to other types of traditional assets that generate stable profitability.
The war between Ukraine and Russia has not been their best ally, even though both nations are using cryptocurrencies to maintain their economies and financial status in a certain way.
Regulations are the most relevant aspect.
Cryptocurrencies have begun to generate more interest in traditional financial institutions, which has made their managers think about the possibility of diversifying their portfolios of products and services.
To offer this type of product, such as cryptocurrency accounts or even cryptographic loans, they must have specific regulations that give them a legal foundation that supports this type of operation.
It is no secret to anyone that not all countries are prepared for a change in the economy; the fact is that if legal instruments begin to be created that in a certain way support their users, they will be able to benefit widely from cryptographic increases, not only governments but the citizens.
To achieve this goal, a global preparation of the population is required. Although those are independent and mainly benefit from the operations carried out directly by their users, Cryptocurrencies require their knowledge.
Just as many countries have regulated the use and management of cryptocurrencies and their investments, there are many aspects to know that must be clear before possible legalization.
The Terra-Luna stablecoin further exposed the need for many to create these regulations; consequently, this fall affected thousands of users, leaving many bankrupt and without the right to demand any protection since these investments are decentralized.
Every time the United States Federal Reserve states a set of measures, even though we think it should not affect cryptocurrencies, let us remember that many crypto investors are in the United States. If its economy collapses, its investments are also limited.