The recent colossal crypto crash last May led to a heart-breaking loss of around 830 billion USD in total crypto market capitalization. Cryptocurrencies, including even the blue-chip ones, witnessed a steep fall, unleashing fear and panic about crypto’s future globally. Added to its 17% drop in April, Bitcoin plummeted to a further 20% in price after the crash. Other cryptocurrencies, like Solana, Ethereum, Cardano, and so on, too tanked to great lows. Crypto investors aside, the May 2022 crypto crash was probably the most devastating for Ukraine. The war-torn country had raised over 60 million USD worth of funds through her crypto-based fundraising endeavor. After the crash, the total fund value was reduced to 51.5 million USD.
The crypto market had experienced terribly bearish phases in the past. But as of 2022, owing to the growing popularity of cryptocurrencies, a larger number of people’s money or investments are at stake than what it was previously. It’s self-explanatory why the world is even more concerned about the crypto future now in the aftermath of the crash.
The post will delve into discussions about crypto’s future in the latter part of the article. But before that, it must be stressed that most of the experts have already assured a promising future for cryptocurrencies ahead, even after the May mayhem.
What caused the crypto crash?
We will get into the discussions about the crypto future but ahead of that, let’s just have a quick look into the major factors that triggered the May crypto disaster.
One of the main reasons behind the crash is certainly the ongoing Russia-Ukraine war and the geopolitical tensions arising out of it. Then, ever since the US government raised the rate of interest, the crypto market has set alarms for red flags. However, the final blow was instigated by a nefarious financial attack on TerraUSDstablecoin that led to a disastrous loss of 40 billion USD in tokens! It consequently resulted in the collapse of LUNA too (sister token of TerraUSD) and the whole incident created a kind of domino effect on the whole crypto market.
How does the future look for cryptocurrency after the crash?
Before getting into further analysis about the crypto future, here are some stats worth considering-
- Bitcoin is currently rallying over the $30k mark after the crash
- Experts have predicted BTC will touch $100,000 by the final quarter of 2022
- Ethereum is expected to touch around $4,000 by the end of the year
- Many other cryptocurrencies, like Dogecoin, Polkadot, and Tron, have seen a rise in price
since the first week of June
- Crypto market is predicted to scale up to around 5 billion USD in total valuation by 2030. It will be 3x the total valuation of the market currently and certainly projects bright prospects for the crypto future
Crypto future not bleak
Well, a small fraction of crypto experts have expressed serious concerns about the future. Some of them have even gone to the extent of stating that the May crypto crash had probably marked the final phase of crypto. But is it only gloom and doom for crypto’s future? On the brighter side, the majority of crypto experts have strongly asserted exciting times for the crypto future ahead.
Much to the delight and relief of crypto enthusiasts, the crypto future is largely heading towards thrilling, more volatile, and more adventurous times. According to the majority of experts, the aftermath of the crash could be mammoth but that doesn’t imply that the crypto market won’t bounce back.
Comparing the recent crash with the 2018 bearish market, some people have been alarmed that crypto’s future is probably getting into the “winter” phase or almost a stage of extinction. There should be less corporate and institutional engagement, a lesser proportion of investments, and reduced developer activities.
But, on the contrary, the crypto market is only witnessing the opposite trend. With every passing year, the crypto industry is seen commanding more involvement and engagement from corporates, elite institutions, and developers. Last year only, the crypto space received a huge volume of institutional capital worth 17 billion USD. Yes, it happened before the crash but the institutions investing the capital surely had long-term goals for the crypto future in mind.
Leading economist and author has opined that the crypto future is going to be more volatile than ever. Crypto is a risky asset and is influenced by factors like liquidity conditions and interest rates. Cryptocurrencies generally don’t have intrinsic value. When Nasdaq Composite stooped to a 30% low, the crypto market tanked by 60%. This trend signals higher volatility for the crypto future.
A key defining aspect of cryptocurrencies, “volatility” comes with both upsides and downsides. If the crypto future is predicted to witness more aggressive volatility than ever, odds are, investors will be rewarded with far higher ROI than they are receiving now. The high volatility factor can make an investor a millionaire in just a few weeks if not days.
However, that doesn’t mean one will undermine the higher risks of losses (due to higher volatility) as well- but the “loss” quotient is just one side of the coin.
Tips for Investors
We will wind up the article that will help you to make the most of higher volatility as predicted for the crypto future. You will also find strategies that will aid to protect you from incurring big losses due to the same volatility quotient.
- If you want to make the most of an exciting crypto future ahead, start with a small amount of crypto investment
- Don’t invest a large sum at once as you never know what the crypto future exactly holds for you. Divide the sum into small monthly allotments
- Make sure the amount you invest won’t affect your daily essentials even if there is an 80/90% dip
- Go for a crypto exchange that allows “LIMIT” and “STOP” trading features to prevent huge losses if the crypto future looks gloomy for some time
- Focus more on long-term goals for a more potential crypto future for your portfolio
- Look for meaningful crypto projects that are specifically developed to make positive contributions toward the betterment of the planet and its inhabitants.
- Diversify your portfolio and think beyond crypto for investment.