The emergence of Bitcoin, which was both volatile and exhilarating, was the investment story of the preceding decade. While Crypto Bitcoin has proven that it isn’t a passing trend, no one knows if it will ever genuinely compete with traditional cash. However, that does not matter.
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Many experts argue that the true worth of Cryptocurrencies resides in their asset potential rather than their acceptability as a medium of trade.
If you want to be an expert on stock trading, you can register on 1k daily profit and learn all about that. But, it does not mitigate the dilemma associated with Crypto assets, right?
So, let’s find out all about the Crypto bubble and if it is the right time to sell or not.
Should You Sell Your Crypto Assets Now?
The Federal Reserve’s decision to signal upcoming interest rate hikes in December sent Cryptocurrencies into a spiral.
The pace and magnitude of the losses, which have wiped out more than $1 trillion in national wealth in a couple of weeks, have been compared to the burst of the Dot-com bubble crash in 2000.
Bitcoin’s price fell as low as $33,000, losing more than half its value since peaking at over $69,000 in November 2021. According to recent findings, the total worth of Cryptocurrencies has dropped to $1.52 trillion, down from more than $3 trillion in early November.
Even Bitcoin prices’ rebound from the last drop in mid-2021 is indicative of the end of a frantic age. Before the decisive knockout, the asset may be knocked down multiple times and then resurrected.
For example, The Nasdaq Composite bounced back from bear-market territory in mid-2000, only to fall deeper into it later in the year.
The fact that a currency can be used to pay rent or buy a snow shovel is undeniable, but a currency’s success isn’t exclusively determined by whether or not it can be used to do so. Bitcoin can’t wield the godlike power of the world’s fiat currencies’ central banks.
Central banks can inject or withdraw liquidity from the economy by managing its supply through monetary policy actions. For example, during periods of rising inflation, these institutions raise borrowing rates and stop selling bonds, all of which are denominated in U.S. dollars.
They also lowered rates and sold bonds as the economy sank. None of this is possible with Blockchain-based digital currencies.
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The crash of the Crypto bubble was so severe that prominent Cryptocurrencies, such as Bitcoin and Ethereum, lost up to half of their value since their peaks, while minor altcoins suffered even more. So let’s find out what the experts are saying:
Chris Burniske, a partner at Placeholder Venture Capital, tweeted that investing in Cryptocurrency is like throwing a bouncy ball down a flight of stairs when the market transforms into a bear. The audience gasps with each bounce, anticipating it to go higher, but gravity only works in one way.
Lorenzo Di Mattia is a manager at Sibilla Global Fund, a hedge fund. He stated that he believed this is the ultimate bear market in an interview. Even if government meddling is excluded, the supply of new Crypto is enormous. The myth of Bitcoin’s “limited supply” is a ruse. A limitless number of coins with comparable or even superior attributes can be manufactured, even if they have a different name.
According to Edward Moya, a senior market analyst at foreign-exchange brokerage OANDA Group, Bitcoin has suddenly gone from a stability pattern to the house of pain. Following the stock market crash, Crypto traders are de-risking their portfolios ahead of the Federal Reserve’s policy meeting next week.
In an email, Mark Arbeter, a technical analyst, said that to break even after a 50% loss, you’ll need to make a 100% gain. We have oversold conditions in terms of a new purchase, and Bitcoin appears to be washed out. It’s approaching $31,600, its 100-week moving average, and what might be strong chart support just below the 30,000 mark. He said he’d only graze on the edges of these potential support regions.
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What Should You Do?
The indications of selling your Crypto assets appear to be there for many who have seen prior financial bubbles burst. Explosive rises are giving way to even more destructive stock market sell-offs.
Cryptocurrencies and similar technologies have been nicknamed Web3 by proponents, but this talk of a new era suddenly sounds hollow.
So, if you are not comfortable holding your Crypto assets in this volatile economic condition, you are welcome to sell them. However, we think it would take time for the Crypto assets to bounce back in the game and assure a stable price valuation.
If you want to know more about these, let us know in the comment box below.