When will the Crypto and Metaverse Bear Market gets over
Updated: Sep 6, 2022
You must’ve listened the term bear showcase being tossed around at whatever point the crypto showcasereliably falls for a drawn out period of time. Truth is, there’s no course reading definition of a bear showcase.
But an normal drop of 20% within theesteem of cryptos from their most later highs is sufficient to enter a bear advertiseagreeing to specialists. By this rationale, the crypto advertise has been bearish since December 2021. That said, this isn’t the primary time the crypto advertise has entered “bear advertise territory”, nor will it be the finalin the event that history is anything to go by.
Current Situation Of The Crypto Market Since December 1st 2021, the esteem of BTC has fallen by $18,000, ETH by $1,900, Binance Coin by $240, and the list goes on. There’s no simple way of putting this - the crypto advertise is having a intense time. Markets don’t abruptlygotten to be bearish, however, as there are numerous reasons includedwithin thepersistentdecrease in costs.
This time around, specialistsaccept that these are the variables for the crypto bear showcase:
Interest rate hike: The US government is planning to raise the interest rate sooner rather than later as they believe that the economy doesn’t need hand-holding anymore.
Falling tech stocks: The crypto market has some degree of correlation with the US equities market and is known to move in tandem with the tech-heavy NASDAQ index, which has been going through a correction over the past few months
Rampant inflation: The US is struggling with record-high inflation along with countries like Brazil, Turkey, New Zealand, and others
Bans and regulations: Russia is vying to ban daily crypto trading completely while countries like India are mulling over a tough crypto bill
The ever-growing crypto market
2021 was a big year for cryptocurrencies in many ways. Big brands started accepting BTC, ETH, DOGE and more as payment, while crypto investments from countries like India soared to record highs.
The cryptocurrency market capitalization reached $3 trillion at one point in 2021, fueled by venture capital funds investing up to $30 billion.
Note that these investments have occurred even in the face of blockchains, new variants, China's cryptocurrency ban, and other events. In short, there is a lot of money invested in cryptocurrencies.
The trend seems set to continue in 2022. A shining example would be the fact that crypto and blockchain startups raised as much money in January 2022 as all African startups did last year.
Don't forget that the African startup market is no fluke and is growing at a rate of knots. This may be because the crypto market is currently promising, as explained in the following headings.
The impact of NFTs on the cryptocurrency market
Non-Fungible Tokens (NFTs) have become famous over the past two years. Artwork and collectibles are known to be the most popular types of NFTs because they sell like hotcakes.
The point is that NFTs are treated purely as assets and have developed separate qualities and benchmarks compared to cryptocurrencies. Think of the Bored Ape versus Bitcoin collection.
But the smartest of NFT investors and cutting edge research can tell you that the crypto and NFT markets are somewhat linked, not in terms of volatility, but investor behavior and uncertainty.
After all, NFTs are built on the blockchain and valued in cryptocurrencies, so a decline in crypto markets will be bad news for NFTs, as investors may or may not be confident enough to pay high prices.
That said, the long-term outlook for NFTs is largely positive according to many experts, and we'll have to wait and see how it plays out against the bearish crypto markets.
The Rise and Rise of the Metaverse
Metaversion will become a reality sooner rather than later as companies like Facebook have rebranded themselves as Meta to show their seriousness.
Cryptocurrencies will play a major role in the metaverse. First, they offer a fast and decentralized way to facilitate transactions, and second, they are completely digital.
Platforms like Decentraland and Axie Infinity have already made some plan to integrate cryptocurrencies with the meta version, which can be seen as a positive long-term sign.
Volatility and bearish runs are as old as the market itself, whether in commodities, stocks or cryptocurrencies, and are driven by a variety of factors.
We have discussed some of these factors for the recent crypto bear market and silver that exists in the form of money pouring into cryptocurrencies, NFTs and the meta.
Whether or not this bear run will end anytime soon remains to be seen. What is certain, however, is that the coming weeks and months will define the fragility or lack thereof of cryptocurrencies.