If you are an investor in the crypto market, you probably know that the crypto market has crashed recently. It is because of several reasons. One of those reasons is because of the war that is currently happening in Ukraine. It has had a massive effect on the rest of the world. This then caused an energy crisis which caused energy companies to increase their prices. With the rising costs of energy bills, people have less money to spend and are starting to sell their assets such as cryptocurrencies.
With the rising costs of energy bills, people are less likely to leave their crypto mines running as long as they have in the past. Therefore, there are fewer people buying and more people selling cryptocurrency assets.
The question is, will the cryptocurrency market recover the high it once had or can we expect it to remain as it is?
One thing that the crypto market world has got away with is that it has not been regulated properly since it started. There have been no independent regulators whatsoever. It is a good thing but also a bad thing.
Once regulators and technology improve within the crypto market, it will slow down the growth of many existing cryptocurrencies. The IMF (International Monetary Fund) stated that crypto is not a niche anymore which is why regulators need to catch up with the modern times.
Once you have stripped everything back, you will notice that cryptocurrency is similar to other traditional financial markets. It makes us question why independent regulators are so behind in cryptocurrency technology. More regulation means more stability to the crypto market which means the market is less volatile. That is a positive right? For many investors this is great but for a select few, this isn’t good. Many people will day trade with the crypto market and wait for the fluctuations to buy and sell their products.
Another improvement that needs to be made in the crypto market is data analysis. There is no reason why the level of analytics that we have in our traditional financial markets cannot be brought to the crypto market. Again, this is something that the crypto market is very behind on at the moment. It will improve the market massively, even for those that don’t necessarily agree with private regulators being involved with the crypto market.
One of the biggest issues with the digital market is crypto scams. Those that don’t necessarily understand the crypto market can easily be manipulated. Fraud is very common in the crypto market so it is something you have to be wary of before investing.
There are more advantages than disadvantages when it comes to these rules which is why we can expect the crypto market to return to its former glory. Technology will only improve the crypto market and potentially make it more of a long-term investment than a short-term investment.
Due to regulating bodies improving technology and analytics becoming more advanced for crypto, this will encourage more businesses to start trading with crypto. It doesn’t mean the large billion-dollar companies either. It can also include smaller companies as well as trade with much smaller ones. Not to mention that it will reduce the number of cryptocurrency scams which occur.