However, it is the riskiest option as well because along with rapid cryptocurrency rates skyrocketing, there are also huge collapses.
The crypto market collapsed in 2014 - 2017 and 2018 - 2022. That was when crypto rates rapidly dropped and stayed that way for a long time. In April 2021, the BTC cryptocurrency coin price reached 63,000, and now (August 2022), the coin’s rate is $23,076. We consider Bitcoin rate changes, for it is the leading cryptocurrency, and it usually “dictates” the overall market trend. So all other digital assets followed this huge drop this summer.
The periods of long crypto drops got the name “crypto winter”. Now let’s find out what crypto rates depend on and what caused the collapse this time.
What Impacts Cryptocurrency Rates?
Here are some factors impacting crypto prices:
- overall market trend and investors’ sentiment;
- supply and demand for coins;
- the complexity of receiving one coin (mining);
- media and news background;
- competition in the market (some projects “die”, while other offer groundbreaking technologies).
What caused the collapse in the crypto market this time? First of all, The FED increased interest rates by 0,50%. This event shook the entire world’s economy. Then the Binance cryptocurrency exchange blocked BTC withdrawals for a while, which also pushed the cryptocurrency coin price to drop. And the last reason was the freezing of crypto transfers and withdrawals by crypto landing company Celsius Network in June 2022. All these factors led the market to such a huge drop. However, we still don't know if this phenomenon can be called “crypto winter”, for the crypto rates can still rebound. Keep track of the market updates and events, and don't forget to diversify your investment portfolio.