In the last year, we have witnessed several crypto-related market crashes that have resulted in significant losses for investors. The first major crash occurred in January 2018, when Bitcoin lost more than 50% of its value after revealing a series of hacks and security breaches at significant exchanges. The second crash occurred in June 2018, when Ethereum’s price fell by almost 20% after rumors spread that one of the largest exchanges would be closing down due to financial difficulties. The third crash happened last month when Ripple’s price dropped by over 30% following news that one of its largest investors had sold all their holdings in exchange for cash. Register now if you are too feeling the crypto force, get ready on the bitcoin trading platform.
In total, these crashes have resulted in hundreds of millions of dollars worth of losses for investors who haven’t been able to recover their investments because they didn’t have enough time to exit before prices fell again. These events are just the latest examples of how volatile cryptocurrencies can be; there are many other reasons why this type of investment is not for everyone. Nevertheless, who can neglect the crypto-made billionaires? All the benefits together clubbed up make people more attracted toward crypto.
- Market Crisis
The market is in a state of distress, and the price of cryptocurrencies is down. While many factors can influence prices, one of the biggest reasons is that the market is in a crisis. The global market is going through a problem at the moment, with many investors selling their crypto investments in favor of bank deposits. This is not to say that these investors are wrong to do so; it’s just a matter of timing. If you’re looking to invest in cryptocurrency, it’s essential to understand your goals and how long you plan on holding your investment. It can be very profitable to stay in crypto as long as possible, but if you see a downturn in prices and decide to cash out early, you could miss out on huge gains. If you’re starting with investing in cryptocurrency, it may be best to wait until there’s less volatility before making any moves.
- Volatility
The market is volatile because it does not follow a set pattern and can change drastically in just a short period. This means that it is difficult for people to invest their money into cryptocurrency because they don’t know exactly how much profit they will make or lose when investing in such an unstable market. Market ups and downs are the most common reason crypto investments go down. This is because the market is volatile, meaning that the price of a cryptocurrency can change at any time. Volatility can also cause a loss in investment value because investors cannot count on how much their investment will increase or decrease in value.
- Past scams and thefts
Cryptocurrency has been riddled with scams and theft over time, so people are reluctant to invest in it because they fear losing their money to hackers or other criminals who might steal it from them while they’re sleeping at night! This makes cryptocurrencies less appealing to investors who want to make money quickly without risking anything! Another reason for crypto investments to go down is past scams and thefts. For example, in December 2018, Binance lost $40 million worth of Bitcoin due to a hacker attack.
- Reduced scalability
Finally, there are fewer scalability issues with cryptocurrencies than traditional stocks or bonds. This means that when you invest in cryptocurrencies, you’re buying into an idea rather than an asset itself—you’re not buying an actual piece of real estate or gold bullion like you might with stock trading platforms like Robinhood (which allows you to buy stocks without having to pay commissions).
Final words
The market is facing a crisis because of the high competition level, making it difficult to make profits. In traditional financial markets, there are fewer returns and incentives, which means that investors cannot earn money from their investments. These grounds aim to reduce or cut on the prices of crypto assets during the passage. This thus results in a highly planned, exclusive, and far-fetched investment portfolio.
