May 2022 has been a month of upheavals for the crypto world! Prices of various coins/tokens kept rising and falling, for no reason. Bad enough that Bitcoin and Ether suffered. Another coin, LUNA, also displayed a drastic reduction in pricing, within the span of a mere week. The reduction was about 99.98%. The fall happened this way. It came down to 96.7% in four days. The fall reached 99.3% over the next two days. Investors attributed these price fluctuations to fraud schemes, such as pump and dump, pyramid, etc. Thus, everyone began to adopt a wait-and-watch attitude. For more information on bitcoin trading, go to bitcoin-motion.cloud official website.
The Current Scenario
The twists and turns viewed across the crypto landscape, are prompting people to suggest that investors/traders should stay with conservative choices, such as the well-known Ether, Bitcoin, etc. Others are even commenting that the pricing volatilities have rendered cryptocurrencies to be more valuable now. However, any expert will tell you that seeking value in an investment possessing no underlying economics, is truly a mistake. People look at the price and use it as a deciding factor for purchasing it or not purchasing it. If there is indecision about dealing with digital currencies, and the volatilities continue, they provide sufficient reason to not buy them, even stronger. After all, there is no guaranteed way to calculate the outcome of such purchases. The investor/trader is taking a simple and pure risk/gamble. No one can even guarantee the reliability of returns, especially since all crypto exchange development are not trustworthy. Additionally, governmental regulations are not present everywhere, but only at certain places. Therefore, an investor must keep track of the company’s performance, its annual revenues, how much may it be expected to make in the future, etc., before spending money on digital currencies.
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Do These Things When Crypto Prices Plummet
Volatility is an integral feature of crypto marketplaces. Before you may blink your eyes, the prices have soared, and they have crashed too! To illustrate, BTC had reached $69,000 during November 2021. Within the span of three months, however, BTC had lost almost half of that value. Its pricing came down to $35,000. The general feeling is that pricing fluctuations help investors gain profits. However, it is not strictly true.
It is important to take note of five actions that should come into play, as soon as crypto markets refuse to remain stable.
Be Calm
Panic purchases or panic sales are of no help. There should be no emotional decision-making either. It is important to ask two questions. Are investments suitable for long-term gains? Does it help to trade crypto, believing that short-term businesses will offer big amounts of cash in rapid return?
The answers should reveal the investor’s goals. If they need modification, well, so be it! Maybe, it would be better to opt for long-term profits. Above all, investors/traders should believe that a marketplace that had been enjoying glorious capital inflows, would not collapse so easily.
Volatility is an Integral Part of Crypto Marketplaces
Pricing fluctuations are governed by trading sentiments. To illustrate, the early months of 2021 revealed investors/traders to be wonderfully optimistic. Over the subsequent months, the mood converted to one of despair and pessimism, because changes were not taking place quickly. Also, the monetary stimulus was not particularly great. Therefore, 2022 began on a sour note.
This is what happens when a digital asset is ruled by sentiment. People’s thoughts, observations, and behavior, influence the market and others. However, investors/traders strive to make the best of bad situations, trying to turn volatility to their advantage.
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Predict the Future
Can new regulations and taxation laws help them to progress, or become obstacles to growth? Observe what has been happening in other nations, and see if it is possible to figure out how cryptos will work in the future?
Tight security should also be an integral part of crypto and blockchain activities. All steps must be taken to prevent cyber criminals from getting away with their crimes.
It must also be noted that digital currencies are generally of no use as normal currencies. Those, who purchase them, simply hoard them. Even if they wish to use them for payments, the concerned authorities in any geographical location should be agreeable. To sum up, cryptocurrencies present both, opportunities, and risks.