Many experts are predicting a cryptocurrency winter. Latest Crypto News winters are prolonged periods of falling prices. The last one occurred between early 2018 and mid-2020. Some experts believe that bitcoin could fall to $20,000, while others say it could fall even lower. Bitcoin’s recent 30% decline is one of the significant reasons many investors are wondering where the bottom may be for these digital assets. Listed below are three key factors that will affect the price of bitcoin and ethereum:
Bitcoin and Ethereum prices have been steadily declining since the end of October. Many are wondering how low these prices will go before they stabilize. Some say it could be as low as $2,000 for Bitcoin and $500 for Ethereum. If that happens, it would mean a 94% decline from their all-time highs.
Prices for Bitcoin and Ethereum vary widely. For example, Bitcoin has fluctuated over the past few days between $18,905 and $20,000 and dropped as low as $18,476 on March 20. Ethereum is also down, going from $1,076 to $986 in less than two hours. Both coins are trading below the $20,000 mark, although the recent price dip was framed as good news for stablecoins.
Probability of a big fall
The biggest danger to the cryptocurrency market is the possibility that the price will crash completely, essentially killing the entire crypto market. However, that doesn’t mean that you shouldn’t be worried that many factors can make cryptocurrencies lose value. If one of those factors occurs, investors will likely be quick to cash out their cryptos and offload them to avoid further losses.
Risk assets experience significant market volatility. Bitcoin, ethereum, and other cryptocurrencies are no exception. The price of these risk assets can be affected by inflation, stock market volatility, or Fed monetary policy. With that in mind, it is crucial to understand what is driving these risks. This article will highlight some of these risks and explain how you can protect your assets from them. A major risk to crypto-assets is heightened inflation.
The risk of a big fall in Bitcoin and Ethereum is very high – a large percentage of the market’s put and call contracts are positioned for price drops of $2k-$2.5k. If an exchange delists Bitcoin, it will immediately delist all its bitcoins. That could mean a huge loss for millions of people. But, if the price drops dramatically, investors would be unable to sell their cryptos back to exchanges, which would lead to massive losses.
Impact of regulatory changes on price
Regulators often focus on three key areas when regulating the cryptocurrency market. The most obvious impact of regulatory changes on the price of Bitcoin and Ethereum is on the regulatory framework. News about general bans or the treatment of cryptocurrencies as securities have the greatest adverse effect on their valuations. However, news about restrictions on the interoperability of cryptocurrencies with regulated markets tends to coincide with market gains. Regulation is necessary to keep the price of cryptocurrencies under control and bolster investor confidence.
Regulators may not be as clear as they once were. The SEC recently confirmed Gary Gensler as its chairman. While this could hurt cryptocurrency prices, it could also stifle innovation in a nascent industry. Furthermore, it could also prompt industry participants to move their operations to countries with less strict regulations. Regulators can help prevent this by purging bad actors in industries and encouraging trust and growth.
The government’s focus on protecting investors has led to new regulations. For instance, the New York Attorney General investigated Tether’s crypto trading platform, and the state took punitive measures. While the state has many advantages, it should also implement its regulations to promote the development of the cryptocurrency industry. While regulations have benefits, cryptocurrency firms should focus on their ethical practices. If they fail to do so, they risk losing their customers and their funds.
Bitcoin and Ethereum prices are highly volatile and could potentially go lower. But for the maximum benefit, you can trade in cryptocurrencies through bitcoin trading software. However, given the current uncertainty and political turmoil, it’s difficult to predict where prices will go next. If you’re interested in investing in either currency, it’s important to do your research first.