Earlier this month, Bitcoin lost a staggering $126 billion in market value, in the recent cryptocurrency market crash. Other tokens and NFT ventures came crumbling down from meteoric highs, and blockchain industry experts have been left to wonder what went wrong.
Where Did Bitcoin Go Wrong?
The promise of Bitcoin was to be a secure currency, impervious to market inflation. History has proven that the cryptocurrency failed drastically on both these fronts. In fact, some industry experts have suggested that market data paints a pattern likening the behavior of Bitcoin to that of Nasdaq stocks.
Bitcoin Versus the Stock Market
Supporters of Bitcoin have been quick to point the finger not at cryptocurrency, but at the traditional stock market, believing that the cryptocurrency market crash brought about as a reaction to Dow Jones falling by 1000 points, the worst reported since 2020.
Are We Headed for Recession?
Also, earlier this month, the US Federal Reserve raised interest rates ever so slightly. Now, predictions of further interest rate hikes and constraints on monetary policy have ignited fears of recession. If America was to enter a period of recession, would cryptocurrency be a saving grace, or would it crash along with other traditional assets? It’s hard to say.
What’s Next for Bitcoin?
As things stand now, experts no longer have high hopes for Bitcoin. Some are saying Bitcoin’s worst days are still ahead, and approaching fast. Some analysts haven’t shied away from predicting that the cryptocurrency could drop to $25,000. Others still believe that the future isn’t all that certain. After all, this certainly isn’t the first time we’ve seen Bitcoin slump. Bullish investors have even suggested that now is the time to ‘buy the slump’, in the hopes of turning a profit on their investments once Bitcoin inevitably rises again.
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