How the cryptocurrency market works: “What has changed?”

What you need to know about BTC, ETH, and other cryptocurrencies Forecasts.

Bitcoin. Bitcoin has no rival who could move it off the pedestal. Most likely, in 2022, the maximum price of BTC will be from $ 100 thousand to $ 125 thousand. If things take a crazy turn, then BTC will be equal in value to gold. In this case, the price may be $ 500 thousand.

Ethereum. Recently, ETH fans have been talking a lot about the fact that Ether will overtake Bitcoin. This is unlikely to happen. Ethereum has scaling issues: sending transactions takes a long time. Analysts suggest asking whether Ether can bypass Microsoft, Apple, or Google? To do this, you need to grow 3-5 times.

Solana and other “non-bitcoins”. The new “star” of cryptography ranks ninth by market capitalization ($30 billion at the end of March 2022). Other young cryptocurrencies are in the same segment: Polkadot ($22 billion), Avalanche ($23 billion), Terra ($34 billion), and so on. All Ethereum competitors have money to compete with, but as an investor, you must either correctly identify the winner among them, or buy a set of several different coins in the form of a single asset, so as not to track the state of cryptocurrencies individually.

DeFi. Despite the huge growth in 2020, decentralized financial systems still account for less than 1% of the market capitalization of global banks. For traders who are convinced that crypto capital markets will displace centralized institutions, DeFi is perhaps the best option in terms of risk—profit. But do not forget about technical vulnerabilities, as well as about the basics of crypto trading– Bitfinex bot.

NFT. It is not easy to estimate the market capitalization of NFTs, since they are not interchangeable. For example, Three Arrows Capital CEO Su Zhu estimates NFT at 10% of the entire cryptocurrency — $225 billion. But this is more about opportunities for digital content authors and infrastructure developers than about the investment attractiveness of some specific NFT projects.


Crypto winter is close

On February 21, 2022, the co-founder of Ethereum, the digital asset market entered the crypto winter. So, in November 2021, bitcoin cost $ 69 thousand, and on February 21, 2022, it was already $37.2 thousand. The authors of the Messari report also warned about this. There have already been two such periods in the history of cryptocurrencies — from 2013 to 2015 and from 2017 to 2018. At this time, many investors risk going bankrupt due to poor tax planning, missing promising projects, and losing sight of the long-term potential of cryptocurrencies.

The authors of the report advise not to rush immediately to buy cryptocurrency “at a discount” since the rate can always drop lower and remain in this state for longer than one can imagine. Any transactions should be made especially deliberately so as not to be disappointed in the cryptocurrency before it regains its position.

There is also a positive factor in the crypto winter – during this time, low—quality and short-lived projects will leave the market. And the unicorns of the next cycle will just be built during the stagnation period.

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