Is the crypto party over?

The price of bitcoin fell drastically, dropping below the carefully watched USD 20,000 milestone to its lowest point in 18 months. Cryptocurrency exchanges and hedge firms ran into difficulties.

Why did Bitcoin prices drop so drastically?

• Since its high in November, the cryptocurrency’s value has decreased by almost 70%. 
• The drop was brought on by market gloom as the Fed tightens to combat the heated inflation, both equities and cryptocurrencies plummeted into a bear market. 
• As a result of their worries about rising interest rates, investors have started selling risky assets. 
• The mood was further made worse by last month’s collapse of the stablecoin TerraUSD. 

Crypto Companies

Crypto companies are also in difficulty. The largest cryptocurrency exchange in the US recently eliminated around 18% of its workforce.

Another cryptocurrency hedge firm ran into issues. Three Arrows, a hedge fund that focuses in cryptocurrencies, has hired legal and financial consultants to discuss asset sales and a bailout after suffering significant losses.

Is Bitcoin still a good investment?

In the realm of investing, there is no “right” response. Many analysts predicted that the decline would seriously undermine public faith in the cryptocurrency industry, but seasoned investors and market bulls remain optimistic about its long-term prospects and see this as an opportunity to purchase at a discount.