Why The Future Of Cryptocurrency Is Looking More And More Ominous
The future of cryptocurrency isn't looking to promising, following steep declines in the valuations of my top-tier coins.
This article is more than 2 years old
Cryptocurrency got a significant boost at the beginning of the pandemic. The virtual currency rose when most people transitioned to online mediums during quarantine. Since Bitcoin’s overwhelming and surprising boom in monetary value last year, it had a sudden, unexpected devaluation. As of Tuesday, Bitcoin, alongside other cryptocurrencies, dipped far below its expected value.
Many investors have started to leave behind the once-promising future of cryptocurrencies. As investors began to sell their stock due to the threat of heightened interest rates and inflation, the value of virtual currencies like Bitcoin has sharply declined. Bitcoin is now trading at half of what it was worth in 2021. A recent figure shows a single bitcoin is currently valued at $23,000.
Two of the largest cryptocurrency platforms restricted monetary exchanges on Monday as they braced for the market decline’s impact. The Celsius Network, one of the biggest platforms with 1.7 million customers, stated that the extreme climate of the current market forced the platform to halt its trading. Withdrawals have also been temporarily postponed, to the frustration of many of the Celsius Network’s traders. The company stated that this action is to “preserve and protect assets,” which will hopefully stabilize once the market climate reverses.
The UK company has a lot to protect in terms of customer assets. The Celsius Network has about $3.7 billion in assets, which is stated publically on its website. That’s a lot to lose when its customers trust the platform with their cryptocurrency exchanges. But suspending withdrawals could backfire for the esteemed company.
As cryptocurrency values soared in the middle of the pandemic, many attempted to cash in on the craze, believing that the value would continue to soar. But unfortunately, cryptocurrency value has had a frustrating reversal, with some of the most popular currencies receiving a swift monetary decline. As national central banks and the Federal Reserve have hiked up interest rates, investors have less opportunity to profit from the stock market. This led to many investors withdrawing their funds and destabilizing the marketplace.
Over the last week, Bitcoin has decreased by more than 8% to a single coin worth $23,000. It’s 67% below its highest value point from 2021, which was going for $69,000 per bitcoin. Ether’s second most valuable cryptocurrency also received a prominent depletion in value. It dropped 32% in value since last Friday, 75% lower than its worth in November 2021. As other trading platforms start suspending their withdrawal function, crypto traders are in a more dire situation regarding protecting their monetary assets.
Another cryptocurrency that’s been hit by inflation and interest rates is stablecoin. Stablecoins are a type of crypto that’s attached to tangible assets. Tether, one of the most popular stablecoins, has become less valuable than the US dollar. But many believe that the Celius Network suspension will not have a long-lasting effect on the Tether’s value or reserve. For many, cryptocurrency was the next step for monetary exchange. Due to a combination of economic crises, crypto like Bitcoin and Ether continue to plummet in price with no sign of stabilization.
