The tough sell-off in the market has not spared cryptocurrencies, as digital assets have recently plummeted by a wide margin. The collapse of the US$2 trillion crypto market has caused many decentralized and stablecoins like TerraUSD And the Luna To go to the upper abdomen, while Bitcoin (CRYPTO: BTC), the largest cryptocurrency by market capitalization, is down 55.97% year-to-date. It is currently down more than 70% from an all-time high of $69,000 in 2021.
Huge interest rate increases by central banks around the world have been a major factor causing the cryptocurrency’s crash, along with the global liquidity crisis, as governments gradually wean themselves off pumping money into economies. The recent stable collapses in the stablecoin have also spooked investors, causing the cryptocurrency to lose most of its gains in the era of the pandemic.
Many cryptocurrencies that are part of the metaverse or crypto gaming space have lost significant momentum in the past six months. For example, cryptocurrency prices like sand And the decentralization It is now down 80% in 2022, wiping out the vast wealth of investors.
Winter encryption and innovation
The pandemic era bull market ended earlier this year as cryptocurrency wiped out its 2020 gains to hit new lows recently. Last weekend, bitcoin prices fell below $18,000 for the first time since December 2020, hitting a multi-year low. Cryptocurrency sell-offs last month wiped out more than $300 billion of market value in what experts claim was a “perfect storm.”
While industry experts are predicting that most of the 19,000-plus cryptocurrencies in circulation will fizzle out during the harsh winter, Bitcoin is expected to regain momentum soon. Scott Minerd, chief investment officer at Guggenheim, predicts Bitcoin and Ethereum To survive the ongoing cryptocurrency sell-off.
However, the recent sell-off has been embraced by crypto tycoons, with experts claiming it is sorely needed. Over the past two years, the rise of cryptocurrency has caused the circulation of digital assets with unsustainable valuations and paved the way for speculative digital currencies without intrinsic value.
Web3 Foundation CEO Bertrand Perez said, “We’re in a bear market. And I think that’s good. It’s good, because it will exonerate the people who were there for bad reasons.”
A bear market is often the cradle of innovation and provides an opportunity to build ground-breaking products. Earlier this month, Cantina Royale announced free Web3-based metaverse components and play to earn on Elrond blockchain network.
The game focuses on adding Web3 elements such as NFT-based in-game assets which creates additional value for players. Cantina Royale has confirmed that the game is fueled by the Verko metaverse experience framework that enables a new gaming experience for players.
Verko’s framework allows game studios to augment titles with blockchain functionality with just a few lines of code. Cantina Royal has raised $4.5 million in funding, led by Elrond and Mechanism Capital.
Bitcoin Price Predictions for 2022
British crypto inventor and hashtag Adam Back expects Bitcoin to reach the $100,000 mark by the end of 2022. However, this is largely dependent on SEC approval of the grayscale BTC ETF application.
The booming growth of the metaverse should drive Bitcoin’s recovery in the near term. With the majority of tech giants investing heavily in blockchain and web 3 development, cryptocurrencies are expected to regain their momentum soon. Also, Russia’s plans to use cryptocurrencies for international transactions may lead to a bitcoin revival.
CryptoNewz expects Bitcoin price to exceed $70,000 by the end of 2022, with a minimum price target of $65,000. This indicates an excellent recovery from the current Bitcoin price levels.
While concerns about a possible recession are exacerbating bearish sentiment, Alex McDougall, CEO of Stablecorp, expects bitcoin to hold up and do relatively well. He said, “The tech side of Crypto will be very good in a recession environment. Especially if a bad recession causes confidence to fluctuate. Don’t forget, cryptocurrency was born out of the crash in 2008.”
Cryptocurrencies are rapidly increasing in popularity as people and governments are exploring the benefits of digital assets. While the recent pullbacks following the Federal Reserve’s 75 basis point interest rate hike have investors worried, Bitcoin prices have held steady above $20,000 levels over the past few days. With many experts stating that the cryptocurrency markets are oversold, Bitcoin is expected to make a comeback in the second half of 2022.