The cryptocurrency market is reeling from the series of shattering blows that have slashed its market capitalization from $2 trillion to just over $864 billion in less than half a year. What was a thriving market that had attracted the attention of institutional and retail investors alike with its extraordinary yields and opportunities has been hammered by a series of scandals and collapses that cast a serious shadow of doubt on the solvency of the industry as a whole.
The blockchain is said to be about transparency and a technology that allows the unrestricted and clear transmission of information in a trustless environment in which everyone can find exhaustive information on the counterparty. However, the collapse of the Terra/Luna project and the ensuing catastrophe with the FTX exchange have proven that trust is the main element in the deficit on the cryptocurrency market. There can be no trust in a market in which exchanges lie about their reserves and use their clients’ money for making shadowy deals revolving around money-laundering, corruption in the highest echelons of power, and numerous other criminal offenses that leave users threadbare.
While FTX was declaring bankruptcy, users of the AAX exchange discovered that they were unable to withdraw their funds, the platform was shut down, the management escaped with the users’ funds, and the support team simply vanished. Such cases are becoming commonplace in the cryptocurrency market after the question of reserve accountability arose and users rushed into a bank run to withdraw their assets.
The new realities on the cryptocurrency market have plunged it into a new and protracted crypto winter, one exacerbated by the geopolitical clash that is hammering the global economy and thrashing financial markets. Investment sentiments are running low and users are skittish to start injecting what remains of their funds into a market that is losing credibility. With trust undermined and many trading venues going offline, the market is certainly encountering one of the worst crises in its history.
However, the new realities of the cryptocurrency market are opening up new opportunities while closing down previous ones. The cryptocurrency market had always been perceived as a place of speculation since its advent in the 2017 era, when millions were invested into the space. The new realities have made it clear that many market players will be eliminated and new strategies will be employed that will help make the market clearer, more secure, transparent, and, most importantly – more profitable in a fair and honest manner.
Investing in cryptocurrency means encountering risks. The prospects of making money with crypto are always present, even on a falling market, since the sole limitation to action is knowledge of how to act. There are numerous strategies in the employ of both investors and traders who are willing to risk what they have as capital and start making money on crypto.
Ethereum and Litecoin are just two of the many cryptocurrencies on the market that are currently giving investors and potential market entrants the possibility of making big gains. With major cryptocurrencies such as Bitcoin falling in value, altcoins are taking the lead and giving investors the opportunity to stock up and accumulate considerable capital. The stock exchange is a perfect example of how cryptocurrency markets can rebound, since the market of digital assets is a mirror reflection of its traditional counterpart in the financial world.
Indeed, prices in falling markets are a godsend for investors seeking to capitalize on potential price gains in the future. The hold strategy is the best approach for risk averse investors who realize that a market rebound is inevitable and a turnaround of the situation will happen based on the cyclical nature of all markets. Coins in portfolios stored on non-custodial wallets will remain safe even in case of a total market collapse and investors will always be able to buy the exchange currency they need to make a difference and collect profits.
There is no chance that a promising industry the size of the cryptocurrency market will vanish or disappear, so investors need not panic. Patience is the sole resource that most investors lack, since many are prone to succumbing to fear, uncertainty and doubt, and therefore abandon potential opportunities for making money with crypto by selling off their assets at dumping prices. In fact, a falling market is the perfect opportunity to identify the market players who are capable of surviving the crypto winter. In fact, only the projects that are capable of retaining their user bases and capitalizations are worthy of attention, since the crisis is proving which projects are of real need to the economy and which are experiments of simple market fluff.
Necessity and real market application are reflected in project capitalization, which means that when a market rebound will happen, such projects will be able to take up leading positions and grow in value. Smart investors research the market and routinely buy up the assets of such projects, eager to capitalize on their current and future success as potential market leaders.
Investors should not disregard active trading if their risk appetites are high enough. Trading on a falling market is an excellent way of catching volatility and capitalizing on active trading sessions that result in high fluctuations of prices. Scalpers, arbitrage traders and other market participants are well aware of the given fact and routinely take advantage of it by opening up hundreds of open positions to hedge the benefits.
Current cryptocurrency market realities are dictating that the industry is headed towards a new phase of development, one that will foresee the application of new rules and approaches to both exchange platform and asset selection. With trust becoming paradoxically paramount in a decentralized industry, it is becoming clear that user centricity is taking center stage and the benefit each project can bring to the user will be the determining factor for its success.
As such, new trading and profit making opportunities are opening up for all users, allowing them to either trade or stock up promising assets that can start growing in the future once the market recovers. And though it is yet unclear when and how the global economy will recover, and when the conflict in Eastern Europe will end, and how it will change the global political and financial landscape, one thing is certain – the cryptocurrency market will start playing a more important and active role in global economics.