Is Cryptocurrency Devaluating – What Are The Main Reasons?

February

8

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We have seen the downfall in the value of various cryptocurrencies, including bitcoin, and it plays a significant role in diminishing people’s trust in cryptocurrency. Furthermore, many people hesitate whether they should invest their hard-earned money in it or not. So, if you are wondering the same thing, then giving it a read will prove immensely beneficial because we will elaborate on the main reasons behind this devaluation.

US Regulation of Digital Assets

According to many experts, US regulations are the main reason behind cryptocurrencies’ dropping values. This step by the US government is discouraging the investors from avoiding going for it.

US Federal Reserve Policy

Federal Government has started an extensive campaign for investors to vend their Bitcoin holdings. In addition to this US Federal Reserve’s policy changes are also becoming a primary reason behind the decrease in Bitcoin price.

Jerome Powell, the Federal Reserve Chair, has told that the Federal Open Market Committee will enhance the double monthly rate and curb asset buying.

The Federal Reserve has taken these steps to control inflation and the adverse effect on Bitcoin prices.

Geopolitical Conflicts

Another reason behind the alleviation in the prices of digital currencies is the geopolitical conflicts that can potentially negatively change the market. It is worth mentioning that Russia and Ukraine are creating great tensions worldwide.

Devaluation of Various Cryptocurrencies

So, here let’s shed some light on how the multiple cryptocurrencies such as Ethereum and Bitcoin have been losing their value since some previous months. So, let’s take a start with Bitcoin.

Bitcoin

The price of Bitcoin was fifty percent below when we compared it with its November high. In November, its value was $69,000, but now it has dropped down to a great extent, and last week its value was $32,951.

Ethereum

Ethereum is quite popular because the NFT collectors mostly use this cryptocurrency. But sadly, since July, it is at its most downward price.

Future of Cryptocurrency

All these reasons mentioned above and this drastic and long-term fall in the crypto-currencies discourage new investors. Even the people who were passionate about crypto early now start losing their interest, and some have drawn their investments.

So, in this vulnerable and unpredictable era of crypto, everyone is perplexed and wants to know the future of crypto.

According to most experts, regulations can play a vital role in determining the future of crypto. Hence, the holders should pay immense attention to it, and they must come up with some impeccable rules and regulations that can curb the chances of any fraud.

Moreover, the first-ever Bitcoin EFT was introduced in the New York Stock Exchange in October 2021. Experts see it as a breakthrough because it will allow people to invest in crypto more traditionally.

Major companies are taking more interest in crypto worldwide, such as PayPal launching the stablecoin. We can say that it’s pretty challenging to make a statement about the crypto future.

What are your predictions about crypto?

About the author, Awi Khan

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