Will cryptocurrency market be volatile in 2022
If equities investors had a fantastic year in 2018, cryptocurrency investors had an even better year in 2021. Prices of certain cryptocurrency currencies have soared by as much as 5,000-7,000 percent, providing investors with mind-boggling gains. Will cryptocurrency market be volatile in 2022
Even blue-chip cryptocurrencies such as Bitcoin and Ethereum saw increases of 35-40 percent in 2021. The trajectory, on the other hand, was not a straight line. Bitcoin prices soared over Rs 51 lakh in April, before plummeting by more than half in May and June as Elon Musk expressed his worries about the effect of cryptocurrency mining on the environment and China tightened down on cryptocurrency trade, among other factors.
The price of certain crypto currencies plummeted by 30-40 percent in hours as panicked investors hurried to liquidate their holdings. Buyers returned in September, and the Bitcoin price surpassed Rs 54 lakh for the second time in November. It has now stabilized at Rs 39.91 lakh, which is almost 32 percent more than where it was at the start of the year, according to Bloomberg. Will cryptocurrency market be volatile in 2022
What to anticipate in the year 2022.
Much will be determined by the policies of the government. In September, China, the world’s biggest cryptocurrency market, prohibited all cryptocurrency transactions. This, according to analysts, would only further isolate China from the rest of the world as blockchain technology becomes more widely used in more places. In India, the government is drafting laws to control the usage and trade of cryptocurrencies, which is currently under consideration.
The Cryptocurrency and Regulation of Official Digital Currency Bill was scheduled to be debated during the winter session of Parliament, but the commotion surrounding the farm bills prevented it from being introduced at that time. The Bill was introduced in the House of Representatives “In India, the government wants to outlaw all private cryptocurrencies. Exceptions are permitted in order to promote the underlying technology and the applications of that technology ” Will cryptocurrency market be volatile in 2022
There are certain fundamental guidelines to follow.
Despite the fact that the bill was not addressed in Parliament, investors’ enthusiasm has not waned in the least. Cryptocurrencies, on the other hand, are a new investment class with limited historical data to base fundamental research on. When entering this high-risk environment, it’s important to remember a few fundamental guidelines.
Will cryptocurrency market be volatile in 2022
Spend just a little quantity of money: Many cryptocurrency currencies have seen gains of 5,000-6,000 percent in the last few months. However, don’t get carried away by the figures on this page. As with any other kind of investment, one should only invest what they are prepared to risk in order to maximize returns. It is recommended that you should not invest more than 10-15 percent of your whole portfolio in cryptocurrency, even if your risk appetite is high. Will cryptocurrency market be volatile in 2022
Get used to dealing with severe volatility: This is a high-risk, high-reward game, and investors must be prepared to deal with a great deal of fluctuation. As the May collapse shown, a drop of 70-80 percent in a single day is a distinct possibility. Be mindful that even a bluechip like Bitcoin is down 25% from its November high of Rs 54 lakh, when it was valued at Rs 54 lakh. Enter this market only if you are OK with significant swings in price.
Make use of a reputable platform: The cryptocurrency market in India is unregulated, and new companies are popping up on a daily basis. Use a well-established and trustworthy platform for your investment, to ensure that your money does not get trapped in the event of an unexpected regulatory setback or a promoter firm going out of business. Investing via an international platform may need additional tax compliance on the part of the investor. Will cryptocurrency market be volatile in 2022
Don’t take action based on tips: There is a serious dearth of reliable information in the cryptocurrency market. Investors rely heavily on unconfirmed information obtained via social media platforms. WhatsApp groups with a large number of accomplices who can testify for their veracity are formed by self-styled crypto analysts. This group of experts preys on unsuspecting investors, first charging them a fee for their recommendations and then employing them in their pump-and-dump operations. Will cryptocurrency market be volatile in 2022
Concentrate on blue chips: The crypto market, like the stock market, includes bluechips, mid-caps, and penny coins to choose from. Don’t be lured to purchase unusual coins just because they are available at a bargain price. Larger coins may be more expensive, but they are more stable. Don’t be concerned about the price since you can purchase in fractions. Bitcoin and Ethereum are the bluechips of the cryptocurrency industry, and they are responsible for driving the general market mood.
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