6 Signs of More Pain for Bitcoin Investors

Bitcoin has been rising since 2021 and tripled in value since November 2021. The digital currency has increased by 70% since the start of the year, bringing the total worth of the crypto market to $2 trillion.

Six Reasons Cryptocurrencies Can Crash

1. History Suggests Reversions Are Commonplace

The history of the crypto market suggests that it is in peril. Although large upswings have occurred frequently during the last decade, reversions are typical.

2. Blockchain Euphoria Outdoes Its Use Case

People can be thrilled about blockchain technology‘s future potential. DeFi allows for almost immediate cross-border payments at low costs, and it can democratize the process so that even residents of emerging markets can participate.

3. Inability To Detach Itself From The Stock Market

Another reason cryptocurrencies may crash in 2022 is the inability to separate from the stock market.

4. Margin Debt Wreaks Havoc

The money borrowed with interest by investors in order to purchase or sell securities on the short side is known as margin. Investors who use margin to leverage their transactions can boost their profits in some cases.

5. Meme Coins Lose Their Magic

Finally, don’t be surprised if the famous “fear of missing out” (FOMO) movements suffocate the bitcoin industry in 2022.

6. Regulatory Issues

This year, regulators exercised their muscles on cryptocurrencies, with China outright prohibiting all crypto-related operations, and the US government is cracking down on select businesses.

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