Will cryptocurrency prices recover? 3 things to know

Will cryptocurrency prices recover?  3 things to know

During periods of economic uncertainty, investors tend to move away from risky investments and put their money behind safer options like bonds or blue chip stocks. While this doesn’t bode well for crypto in the short term, it’s not necessarily a bad thing. In the case of crypto, much of the sector’s decline is related to the Federal Reserve’s recent announcement that it plans to hike interest rates and roll back stimulus measures intended to boost the economy. Cryptocurrency is a long-term investment, and the current uncertainty won’t last forever. At some point, investors will be more willing to take on risk, and there will likely be a renewed interest in crypto.

1. Factors contributing to the recent crypto crash Image source: Getty Images.

Whenever any investment or sector starts to decline, it helps to look at the big picture. This can determine whether the sell-off is due to the specific investment itself, or if there are larger factors at play. The crypto market is shaky right now, and nobody knows for certain what will happen. Just how likely is it that prices will recover? Here’s what you need to know.

Downturns can be intimidating, but major players in the crypto sector have weathered some severe storms and come out the other side even stronger. 3. Crypto is speculative For instance, the price of Bitcoin (CRYPTO:BTC) has fallen by more than 80% on multiple occasions since 2013. In 2021, Ethereum (CRYPTO:ETH) plummeted by nearly 54% in a matter of weeks. And back in 2018, Ethereum lost close to 95% of its value over the course of the year.

Although the crypto sector has seen unprecedented growth over the last couple of years, it’s no stranger to volatility. In fact, compared to previous downturns, this recent slump is mild. 2. Crypto has a long history of extreme volatility

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