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Cryptocurrency markets are highly volatile. Investing and earning in cryptocurrencies can sometimes become challenging. People believe that it is just the beginning of cryptocurrencies, and there is a long way to go for these assets.
Many banks and governments call these assets a bubble and a waste of money, but it isn’t like that. Anyone who closely follows crypto news knows that this is not a bubble but an actual asset that will help reduce inflation.
Everyone knows that cryptocurrency markets are highly volatile, and investments can be risky. Therefore, it is better to follow your investments closely. Hence, here are the latest developments that can affect your investment values.
High Market Volatility
Currently, the cryptocurrency market is on a roller coaster. In the past two years, almost all major cryptocurrencies have created new all-time highs. For example, Bitcoin touched a price of $65,000 and then went tumbling down to $35,000; this clearly shows the market conditions.
Investors nowadays are thinking of creating quick bucks and then dump prices. Therefore, high market volatility can affect investments significantly. Because if you hold some currency that undergoes a massive dump, your investments might get washed away.
Fear, Uncertainty, and Doubt at Peak
Along with the prices of cryptocurrencies, FUD is also at all-time highs. Most mainstream media doesn’t cover in-depth crypto news and focuses more on government crackdowns, creating fear in the investors.
Cryptocurrency markets are notorious, and no one seems to predict them precisely, making it the most uncertain asset class. As uncertainty and fear increase, people tend to doubt their investments. As a result, they sometimes panic and sell at a loss to get rid of the fear.
Government Regulations
Although cryptocurrencies are decentralized, governments are trying out ways to have a hold of them. In addition, cryptocurrencies aren’t regulated by governments and other institutes, making it easy for market manipulation and other illicit activities.
Governments want to regulate cryptocurrencies to introduce fair practices in the business. However, many governments consider cryptocurrency useless and are cracking down on it, making all activities related to it illegal.
Increased Institutional Investment
Large asset management companies are now turning towards cryptocurrencies seeing lucrative earnings. This brings high investments into the cryptocurrency pool, driving prices upwards.
For people advocating in favor of cryptocurrency, this is excellent news. As asset management firms shift towards cryptocurrency, it is noted that the prices will surely increase as these firms trade strategically and also invest heavily. Though fewer institutes are investing in cryptocurrencies, it hints towards a great reform in the market conditions. As a result, more asset managers will look into this asset class in the future.
Adoption of Decentralized Apps
Blockchain and related technologies power developers to create excellent peer-to-peer applications. As a result, estimates show that there will be an increase in the usage and adoption of decentralized applications over the coming years.
Many blockchains allow the development of d-apps. The first blockchain was the ethereum blockchain, which currently powers more than 2500 decentralized applications. In addition, new technologies like TRON and EOS are on the rise and now help around 750 developers.
Investing in cryptocurrencies is an excellent way to save money from inflation while earning profits. As adoption of these assets will increase, so will their price. Though the markets are highly volatile, having the right trading strategy will make you good money if you are just here for trading.
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