Wednesday, June 29, 2022

When Will Crypto Bounce Back

Crypto Market Will Bounce Back Claims Billionaire Tim Draper


    As the period of uncertainty for the crypto space continues, not everyone seems to be equally as scared for the future of digital currencies. Despite the recent Bitcoin sell-off, billionaire and major crypto investor, Tim Draper, seems to believe that a period of recovery is about to start soon.

    While even the near future of Bitcoin and other digital currencies cannot be predicted with accuracy, Draper believes that Bitcoin value is going to keep getting higher, especially in the next several years. In fact, he even stated that cryptocurrencies will likely overtake fiat currencies at some point in the future.

    During the Las Vegas-based World Crypto Con, Draper stated that cryptocurrencies will be much easier to spend, use, and invest with, in the near future. People will be able to do whatever they want with them since they are frictionless and they cost less. These reduced costs alone will be a significant improvement for people, according to Draper.

    He believes that for these and other, similar reasons, people will eventually want to move to cryptocurrencies, while fiat currencies, which he calls political currencies, will be left behind.

    In the meanwhile, the market remains unstable, with Bitcoin often going below and above $4,000 per coin. The lowest that it ended up being this year was at around $3,700, which happened only days ago, while Bitcoins current price remains slightly over $4,000.

    Will The Cryptocurrency Market Recover

    • 15:35, 6 Oct 2021

    CRYPTOCURRENCIES have risen in value again,proving the volatile nature of coins like Bitcoin, Dogecoin and Ethereum.

    The value of Bitcoin has surged above $50,000 and the global crypto market is up 3.91% at the time of writing.

    The extreme volatility and the accompanying sudden market falls are one of the reasons that investing in cryptocurrency is a very risky business.

    You should never invest in something you dont understand and make sure you don’t put in money that you can’t afford to lose.

    Flash Crash On Pyth Network

    Bitcoin briefly crashed to $5,402 Monday on Pyth Network oracles BTC/USD feed, causing liquidations to occur on a highly uncertain published price.

    The Solana-based oracle network acting as a bridge between blockchains and real-world data said the flash crash was caused by two of its data sources publishing a near-zero price and receiving a relatively higher weight from the networks aggregation logic. As such, the average price crashed to lows near $5,000, reports CoinDesks Lyllah Ledesma.

    Read Also: How To Buy Cryptocurrency On Robinhood

    Central Bank Money Pushes Cryptocurrencies Higher

    But then there was also the reason that the US dollar dropped.

    At the end of last week, a ‘hawkish’ US Federal Reserve committee member Bob Kaplan spoke on Fox Business Network. .

    Kaplan said he was keeping an open mind about when to start withdrawing stimulus in light of the effect the Delta variant of COVID was having on large parts of the US economy, particularly in the South.

    Because of Delta, the Fed has also abandoned its planned in-person annual symposium in Jackson Hole, Wyoming starting on Friday in favour of an online event.

    This itself has been seen by many as an acknowledgement by the Fed that we are still far from a post-COVID world.

    So, the general expectation is that Fed chairman Jerome Powell won’t explicitly flag pulling the pin on stimulus when he speaks on Friday and, with the punchbowl still on the table for a while longer, investors are keeping the party going for a range of assets.

    As Welt financial markets commentator Holger Zachaepitz recently explained through a series of tweets, this central bank largess was associated with price rises across a range of asset classes.

    From Bitcoin:

    To shares globally:

    Even to houses :

    Aside from pumping more money into the system that big investors are using to buy assets, central bank actions continue to cause many to fear the debasement of fiat currencies, causing some to turn to cryptocurrencies as one ‘hedge’ against that.

    Shiba Inu And Its Possible Outsized Moves Ahead

    Bitcoin to the Moon? Crypto Markets Bounce Back  Heres Why

    Sure, so far, SHIB-USD hasnt gotten much of a boost, despite the major coins starting to bounce back. Yet dont take that to mean it wont start moving in tandem, or outsized, relative to the overall cryptocurrency market. The rebound is just now getting started.

    Factors such as the upgrades for Bitcoin, Ethereum, and Cardano could convince investors that crypto is still the start of something big, instead of a passing fad. As prices continue to rise, and early movers reap fast profits, more cautious trend-followers could jump back in as well.

    Crypto may not get back to the bubble mode it experienced earlier this year. But just like how the meme stocks trend saw a second speculative wave in late May/early June, cryptos could as well a few months down the road. So, how will this lead to higher prices for Shiba Inu?

    If it finally becomes available for trading on Coinbase , expanding its pool of possible buyers, and speculative fever partially gets back to prior levels? We could see this jokecoin make parabolic moves once again.

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    Risks Of Crypto Investments

    THE Financial Conduct Authority has warned people about the risks of investing in cryptocurrencies.

    • Consumer protection: Some investments advertising high returns based on cryptoassets may not be subject to regulation beyond anti-money laundering requirements.
    • Price volatility: Significant price volatility in cryptoassets, combined with the inherent difficulties of valuing cryptoassets reliably, places consumers at a high risk of losses.
    • Product complexity: The complexity of some products and services relating to cryptoassets can make it hard for consumers to understand the risks. There is no guarantee that cryptoassets can be converted back into cash. Converting a cryptoasset back to cash depends on demand and supply existing in the market.
    • Charges and fees: Consumers should consider the impact of fees and charges on their investment which may be more than those for regulated investment products.
    • : Firms may overstate the returns of products or understate the risks involved.

    Why Did The Crypto Market Crash

    Following Teslas decision, the market was already experiencing a turbulent time before China announced a clampdown on cryptocurrencies which saw prices plummet.

    China banned all of its banks and financial institutions from offering clients any services involving cryptocurrencies, which included coin offerings and transactions.

    The countrys financial industry bodies also warned against speculative trading.

    The National Internet Finance Association of China, the China Banking Association, and the Payment and Clearing Association of China released a combined statement.

    It read: Recently, cryptocurrency prices have skyrocketed and plummeted, and speculative trading of cryptocurrency has rebounded, seriously infringing on the safety of peoples property and disrupting the normal economic and financial order.

    China has since ordered Bitcoin mining in its Sichuan province to shut down completely and told banks to stop supporting crypto transactions, in a latest wave of restrictions on cryptos which have seen prices tumble.

    Recommended Reading: How To Take Crypto Off Exchange

    Will Crypto See Phenomenal Gains Once Again

    If you missed out on the last crypto craze, it may be tempting to invest in cryptocurrency now to take advantage of this rebound. But there’s no guarantee that prices will return to their record-shattering highs.

    Before you invest, think about why you’re interested in buying cryptocurrency. If it’s solely to get rich overnight, that can be a risky move. Investing isn’t a “get rich quick” scheme, and putting a lot of money behind an investment that may or may not pay off could be a costly mistake.

    On the other hand, if you want to buy crypto because you believe it has a bright future, it doesn’t necessarily matter when you invest. The best investing strategy involves taking a long-term approach, so it’s wise to buy only if you intend to hold onto your investments for at least several years — if not a few decades.

    Because you’ll be holding your investments for the long term, it may not make much of a difference whether you buy today, a month from now, or six months from now. In other words, if Bitcoin is eventually worth, say, $500,000 per token, it won’t necessarily matter whether you bought it at $35,000 or $40,000 per token. Either way, you could still stand to make a lot of money if crypto succeeds.

    Why Dogecoin Surged In The First Place

    Will Crypto Bounce Back? (China BANS Cryptocurrency)

    First, it’s important to understand what caused Dogecoin to experience such explosive growth. The cryptocurrency has been around since 2013, but it rose to fame only a few months ago. So why the sudden interest from investors?

    It’s primarily due to retail investors artificially inflating its price to try to make money quickly.

    Dogecoin does not have the strongest fundamentals. It has little to no utility right now, and its competitors outshine it in several areas. But it’s an inexpensive investment , so it’s easy for investors to load up on it and drive up the price. Then once the price has increased substantially, investors can sell their tokens and make a quick buck.

    Dogecoin’s price increases have also been fueled by celebrities like Elon Musk and Mark Cuban promoting the cryptocurrency online. This has encouraged more investors to jump on the bandwagon, driving up the price even further.

    Recommended Reading: How Much Is It To Buy One Bitcoin

    Defi Stablecoin Lending Rates Rise

    The stablecoin lending rates in the decentralized finance market is gearing up, according to crypto data analytics firm Skew.

    The increase could be short term but is worth watching closely, said Dan Weiskopf, co-portfolio manager of the Amplify Transformational Data Sharing ETF at Toroso Asset Management.

    Weiskopf wrote:

    If the doubling of the yield from the 3% to 4% range continues, there could be an issue in the promised land nothing is free and getting paid a lot for something that is stable could be a sign of something to come.

    This increase is also curious after Julys lull in trading activity, so we will be watching for volatility.

    Tesla And China Deal Double Hammer Blow

    The cryptocurrency market had been going from strength to strength until a seismic tweet from tech wizard and Tesla CEO Elon Musk in May. In his missive, Musk announced that Bitcoin would no longer be accepted by his company due to the enormous amounts of energy that the technology consumes in mining coins and approving transactions. The price of Bitcoin was slashed by a third in the immediate aftermath, with most other major cryptocurrencies also suffering from the shockwaves of the announcement.

    More bad news for the market would follow just days later. Less than a week after Musks tweet, the Chinese government that it would ban the use of cryptocurrencies by its financial institutions, effectively outlawing them altogether in the country. Unsurprisingly, this prompted a further tumble in the value of Bitcoin and its counterparts, leaving them languishing at the lowest levels for many months.

    Also Check: How To Short Crypto In Us

    Chinas Ban On Bitcoin And Cryptos Bounce Back Ability

    Bitcoin is on shaky ground once again, as Chinas central bank declares all cryptocurrency transactions illegal. The change in law has effectively banned trading in cryptocurrencies across the country.

    It has introduced Chinas final stance in the virtual currency debate, though it can be argued that this outright ban had been on the horizon for years.

    With the announcement of this new policy, we watched Bitcoin prices dip as people inevitably reacted to the news, but it seems the market leader has already bounced back. According to Market Insider, Bitcoin has been declared dead over 400 times since its creation in 2009 and has faced countless denouncements from finance and business specialists over the years. One of the most notable, recent criticisms of Bitcoin came from Elon musk as he, now infamously, turned his back on the virtual coin which he had previously enthusiastically supported, once accepting Bitcoin as a payment method for Tesla products. The sudden change of tack caused some disruption to public perceptions of cryptocurrency and yet, Bitcoin has remained popular amongst investors and traders. But why?

    Why Is It Bouncing Back

    BITCOIN and CRYPTO Bounce Back!! Was This Entire Crash ...

    Thursdays price increase could be down to investors buying the dip.

    Freddie Evans, a sales trader at the UK based digital asset broker GlobalBloc, told The Independent on Wednesday: The markets have taken a tumble this morning after Bitcoin broke the $60,000 support. Investors have been on edge expecting a correction as the markets have looked over leveraged.

    The drop has been predicted by many analysts and provides an opportunity to those looking to buy the dip, meaning it could be that this re-tracement is short lived and we head back above $60,000 before too long. Almost all coins are down over the last 24 hours, but weve seen more buyers than sellers in this mornings session so far.

    On Wednesday evening El Salvadors president, Nayib Bukele, announced the country has purchased 42 more Bitcoin.

    It was a long wait, but worth it.We just bought the dip!

    Nayib Bukele ????????

    Mr Bukele is a huge advocate of cryptocurrency, and the country became the first in the world to accept Bitcoin as legal tender last month.

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    What Is Dogecoin

    Much like Bitcoin, Dogecoin is an open-source cryptocurrency which can be traded and exchanged across decentralised peer to peer networks between users, with tokens of value reaped as rewards for users operating in lieu of banks or governments to ensure the validity of its transactions.

    Paying tribute to the shiba inu doge meme circulated far and wide across the internet for years, Dogecoin was created in 2013 as a satirical take on the booming popularity around more traditional coins like Bitcoin and their cult following.

    But the coin has come full circle, with it now being taken just as seriously as its crypto competitors after its visibility increased worldwide over recent years.

    Where this coin differs to Bitcoin, Tether or Ethereum is that it has spread like wildfire on account of its meme origins and appreciation by Tesla founder and cryptocurrency aficionado Elon Musk.

    The irreverent tech billionaire earlier this year sent the crypto market into a tailspin when he announced that Tesla would be suspending Bitcoin payments for its vehicles due to the currencys considerable environmental impact, and has routinely mocked Bitcoin while praising Dogecoin online and inflating the price of the memecoin.

    Why Are They Up

    It’s not clear what has caused Bitcoin’s, and other coins’, spike in value – proving the volatility of digital currencies.

    The coins suffered earlier this year after they were hit by other market forces and tougher regulation.

    Most recently, stock markets dived as investors sold off a large number of assets in a short amount of time, which affected cryptocurrencies too.

    Earlier this year, the Met Police also seized nearly £180million in the largest-ever cryptocurrency raid in the UK.

    Meanwhile, the worlds biggest cryptocurrency exchange, Binance, was banned from operating in the UK by the financial watchdog in June.

    While Brits can still buy and trade coins on the platform, it means Binance is no longer allowed to “undertake any regulated activity” in the UK.

    China is also getting tough on cryptocurrency mining – the energy intensive method of creating new coins.

    A number of authorities across the country have ordered crypto-mining projects to close – including the Sichuan province.

    Iran has banned the mining of cryptocurrencies including Bitcoin for nearly four months because the country faces major blackouts and mining uses lots of power.

    Meanwhile, poster adverts for cryptocurrency platform Luno have been banned for failing to mention the risk of Bitcoin investments.

    Recommended Reading: How To Sell Crypto On Binance

    Critical Information For The Us Trading Day

    J.P. Morgan strategists said they’d adopt a positive view on bitcoin if two key indicators reversed course.

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    Bitcoin and other crypto assets have had a rough ride over the past month.

    While the leading crypto got a boost on Wednesday after news that lawmakers in El Salvador voted to approve bitcoin as legal tender, its price remains nearly 40% below highs of around $60,000 from as recently as a month ago.

    Our , from strategists led by Nikolaos Panigirtzoglou at investment bank J.P. Morgan, is that two key measures indicate that bitcoin BTCUSD, +0.36% is in a bear marketand they can also tell investors when its over.

    The first red flag is that bitcoin futures have shifted into backwardation for the first time since 2018, the strategists said. Backwardation is when the current price of an asset is higher than the price trading in futures markets. Futures for the other leading crypto asset, ethereum ETHUSD,, have also approached that critical turning point into backwardation, as seen in the chart below.

    This is an unusual development, said the J.P. Morgan team. And a reflection of how weak bitcoin demand is at the moment from institutional investors that tend to use regulated CME futures contracts to gain exposure to bitcoin.

    We believe that the share of bitcoin in the total crypto market would have to normalize and perhaps rise above 50% to be more comfortable in arguing that the current bear market is behind us, said the J.P. Morgan team.

    Whats Behind The Latest Bitcoin Drop

    Crypto Therapy Session: Will Bitcoin Bounce Back? PART 2

    Many investors see Bitcoins price swings as part of the game, but volatility is tough for individual investors to deal with, Noble says. Like Yang, he warns against selling too fast.

    While this recent drop is reminiscent of 2017s sell off, Bitcoins presence has grown a lot since then. New short-term investors who are selling their holdings in reaction to the drop may be influencing the continued dip in Bitcoins value, according to a recent report from Glassnode Insights, a blockchain analysis firm.

    While fluctuations are expected, Noble says this swing is a bit out of the ordinary. I thought the market was maturing and these things would be less frequent and severe. Boy was I wrong, he says.

    This particular drop was caused by a combination of factors that may have made this drop more severe, Noble theorizes, from excitement about low-quality coins, to negative remarks from Elon Musk, to Chinas latest crack down on crypto services. The accumulated response made this sell off all the more violent, says Noble.

    He likens the drop to the stock market crash of 1987, from which the markets took months to recover. But because crypto moves a lot faster today than equities did in the 1980s, Noble says we may see a quicker recovery.

    Dont panic and puke, Noble says. If you keep your positions small, you can try to tolerate the volatility.

    Also Check: What Is The Best Time To Buy Cryptocurrency

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