You may not belong to the crypto community but must have heard about the crypto crash in recent times.
Cryptocurrency has not been adopted despite some of its exciting features in many parts of the world. This is due to the concerns about its ups and downs in prices which could make or mar investors.
Bitcoin, the number one cryptocurrency, and other cryptocurrencies started 2022 on a high note. Since the end of March, cryptocurrency has been dropping slowly in price. Although there has been stability in between, who knows if crypto would bounce back?
In this post, we’ll discuss the recent crypto crash and see if it’ll bounce back. Before then, let’s have a sneak peak into the world of crypto for the sake of beginners.
What is Cryptocurrency?
Cryptocurrency is a digitally encrypted, decentralized currency that is not linked to or regulated by any government or central bank.
It is based on blockchain technology, which is a distributed ledger framework. Bitcoin is the first cryptocurrency created which has led to the creation of others alike known as altcoins.
Cryptos are categorized as virtual or digital currencies. They were originally developed to provide an alternative mode of payment for online transactions.
However, cryptocurrencies have not yet been generally adopted or legalized by many nations. They are actually too unreliable to be used as payment methods.
Will crypto bounce back after crypto crash
What is Crypto Crash?
Crypto crash can simply be explained as the sudden fall in the price of cryptocurrency. Here, prices can drop by over 10% within a single day.
Crashes are often triggered by impactful and sudden moves in the cryptocurrency market that could cause panic among the investors who exit the market en masse.
Crypto regulation, influencer’s volatility, government regulation, as well as lack of liquidity in cryptocurrency may also be the cause of a crash.
Crypto Crash in 2022
As stated above, cryptocurrency started the year on a high note which had some digital assets reaching their all-time highs.
There has been a dip in prices since the end of March will hasn’t crypto to get back to its initial price in 2022. Bitcoin has fallen in price and has affected every other cryptocurrency.
Cryptocurrencies such as Dogecoin dropped 2.7% to $0.088207. Shiba Inu also witnessed a much steeper drop at 6.3% at $0.00001212 at some point.
The biggest crash so far in the year came in early May. In a week, it dropped further than it had in the preceding month. This was attributed to the catastrophic failure of one of crypto-promising project, Terra (once valued over $50bn but ended the week worthless).
TerraUSD, stablecoins at this point wasn’t stable which shows that even Stablecoins are not without risks. Similar projects saw their value stumble as investors feared they would follow.
It took until mid-May for the crash to stop, but while the market has regained some stability, it shows no sign of returning to its peak of early 2022.
As of today, the price of Bitcoin is $29,537.85 from a price of $40-48 earlier in the year. ETH today sell at $1,753. 24, DOGE at $0.07957, DOT at $9.02, BNB at $278.84, and so on. These prices are below the prices at which they sell earlier in the year.
Terra-The Major Cause of Crypto Crash in 2022
Tether (USDT) and USD Coin has been the two most notable stablecoins in the crypto market. These cryptocurrency tokens have a fixed value of, typically, one US dollar.
Terra came to be another new type of stablecoin that will keep crypto value algorithmically rather than through the actions of bankers. LUNA (one of the tokens from Terra) is supposed to float freely, while Terra USD, is supposed to always have a value of $1.
Terra USD can always be turned into LNA at a value of $1-so if the cost of Terra gets low, its holders are incentivized to destroy the currency in order to raise its price.
The problem here is that LUNA has to a value which it did at some point. This is due to the aggressive offer to pay 20% interests on savings held using the currency.
And then, in the middle of the crash, as investors started to pull their money out to cover loses elsewhere, the plan didn’t work. The experiment to turn LUNA into Terra USD eventually failed. This led to a major crash in the crypto market.
Will Crypto Bounce Back After the Crash?
The cryptocurrency sector has survived huge crashes before. Although critics have predicted a NO-future for cryptocurrency, there’s a chance that it would bounce back.
The crypto economy is still value at more than $1 trillion, there’s certainty that the coins would peak again. In fact, many crypto enthusiasts has advised that this is the best to buy.
Crypto has generally grown through finding ever larger pools of new customers. But this latest bust might be so huge, and so widespread, that there are few new customers to find. Those who hold their savings in crypto might be tempted to sell in order to pay bills and might find none to send to.
This may have negative impact on the upturn of crypto and may even cause more people to stay away from crypto. Nevertheless, the averse-risk takers could still earn a fortune by sticking to these digital assets.
If you can still take the risk and buy at this moment, who knows what may happen in the coming months just as it has been in the past crashes.
Where To Buy Top Crypto Assets in Nigeria Despite Crash in 2022
Bitcoin and several altcoins can be purchased on platforms with the Nigerian Naira or you convert them to Naira or altcoins at exchanges.
There are many companies in Nigeria where you can buy crypto assets. The best and most reliable among them today is Prestmit.
Prestmit is one of the most trusted and reliable platforms for your crypto trading. You can buy top crypto assets such as Bitcoin, Dogecoin, USDT, and Litecoin on this platform at good rates.
Payment option available here include Nigerian Naira, Ghanaian Cedis and USDT. Prestmit also has its tentacles spread to Ghana, West Africa.
The Bottom Line
The crypto economy has experienced fall in prices of Bitcoin and other digital assets. Terra’s catastrophic crash has also shaken the crypto market. Despite this, crypto is believed to bounce back after doing the same in the past although the recent crash is so huge and widespread.
The major advice for crypto beginners is to study the market before going into it. If you’ve decided to put your money, it is better to invest what you can afford to lose as returns is no guaranteed.
Also Read– Top Memecoins To Buy Despite Cryptocrash
