In the past year, Bitcoin has gone from being merely a popular niche investment to being a household name in the world of finance. This cryptocurrency’s meteoric rise in 2017 saw its value increase by more than 1,000 percent as it went from $1,000 to nearly $20,000 before beginning a slow descent down to its current price. While this might seem like an obvious time to panic, there are several ways you can stay calm and weather the current crypto crash storm.
Why is crypto crashing?
You’ve probably found yourself asking, why is crypto crashing? How assets perform in the market reflects on the economic conditions at hand. With the financial crisis, expansionary fiscal policies increased capital in markets and subsequent growth. This also means that cryptos’ value in the market increases. However, with the increasing rates of inflation witnessed globally, the market environment doesn’t favor asset growth. This is why high beta assets like crypto are crashing.
Will the trend get worse?
Is this the right time to visit the best place to buy crypto Australia? It’s quite understandable to doubt their asset value, given the recent trends. But you have to wonder whether this is permanent or short-term. The good news is that this isn’t the first time it has happened. In fact, Bitcoin experienced a 71.25% drawdown from its 2021 high. And also, this asset has endured three cool drawdowns in the last decade!
Investors can also take solace in crypto institutionalization. In recent times, Bitcoin has been gaining correlation with other high beta equities. With these correlations, cryptocurrencies suffer when markets are risk-off. So, it’s valid to ask why is crypto crashing.
Is there a plan to get on track?
At the moment, cryptos’ price at the best place to buy crypto Australia ranges between 20000 and 25000. But not to worry! Few factors could salvage cryptos, albeit in the short term. First, they depend on reigning monetary policy since they are high beta assets. With the scope of price depreciation across the assets, investors only need a ‘less bad’ hawkish outlook for positive price action on risk assets. Therefore, if brick-and-mortar markets turn around, it is more likely that crypto will follow. Interestingly, cryptos are anticipated to outperform the normal equities. This should be very interesting for investors in crypto, particularly Bitcoin.
How can you weather the storm?
The current crypto crash shouldn’t come as a surprise to you. Any investor worth his salt should be prepared for any eventualities. To protect your investment and weather this storm, here are some measures you can take:
Consult the experts
Consult your best place to buy crypto Australia about your options. They will assess your situation and give you the best way to safeguard your investment. Normally, you’ll find experts with vetted expertise for all your investment needs.
Diversify your investment portfolio
Putting all your investment eggs in one basket is a bad idea. You might also want to look into other ways of investing outside of cryptocurrencies, such as stocks or shares. By diversifying your portfolio, you’ll be able to minimize any risk and keep your confidence high.
Conclusion
Why is crypto crashing? It’s definitely not uncommon in the digital asset world. Despite the current market conditions, there are still opportunities for those looking to invest in cryptocurrency. You can weather any storm by doing your research, staying up-to-date on news and developments, and partnering with a crypto financial management firm.
