Crypto holders are sweating in big drops these days. The cryptocurrency market has already done better – it’s an understatement.
After reaching a peak of C$80,527 in November 2021, the market value of Bitcoin traded at $28,154 at the end of the day on June 15, 2022. The flagship crypto has dragged all the other banners into its apocalyptic collapse. The crypto lending company Celcius Network even announced on June 12 that it was suspending all withdrawal and inter-account transactions in order to “stabilize liquidity”.
In light of all this, is it time to get rid of your cryptos?
“I would say that it all depends on the person’s situation and objectives,” raises the manager of the cryptocurrency extension Instagram page and “crypto education” Sato.Crypto.
“Unfortunately, there is no single solution that will work for everyone,” the manager told Noovo Info. It is certain that for a person who is there over a longer period of time (two, three years and more) it is exactly in this kind of moment that we want to accumulate solid projects. It all depends on taking the risk afterwards. Some want to play it [safe] and others want to add a little more risk.” (0.09 eth to usd).
In his more personal opinion, it is not urgent to sell, except for a person who needs these funds to live. “Otherwise, it makes no sense, in my humble opinion, to sell today,” says the one who has a bachelor’s degree in business administration and who has been interested in the world of crypto for about six years.
The time for questioning
Under the rules of the Autorité des marchés financiers (AMF), Desjardins’ senior economist, Hendrix Vachon, cannot decide whether or not it is time to sell his cryptocurrencies. However, the fact that this decrease occurs at the same time as an increase in interest rates is provoking reflection, according to him. It is therefore less interesting to hold assets that do not earn interest.
“Given that interest rates are rising, it discourages speculating on investments that do not earn interest,” says Mr. Vachon.
The economist adds that the fact that central banks are able to take measures to fight inflation somehow discourages the thesis that traditional currencies would collapse shortly.
While some claimed that crypto would be able to protect investors from inflation, the current situation thus proves the opposite, according to Mr. Vachon. “We see the U.S. dollar very strong and central banks are raising interest rates.” (0.1 bnb to usd).
Desjardins’s senior economist believes that the decline in cryptos could encourage investors to be more selective in their investment choices. So kinds of corporate shares that are exchanged on blockchains, it could have more value than a token that has no affiliation.
The end of cryptos?
According to Hendrix Vachon, if this wave trough does not necessarily sound the death knell of cryptocurrencies, it could nevertheless discourage many from investing in the coming months. The craze for cryptos has created a speculative bubble, explains the economist. In his opinion the price was growing because people were buying some cryptos. Now that prices are falling, demand is collapsing. Prices therefore continue to fall and it is impossible to predict how far it will fall.” One reason behind the crypto explosion could also be due to the aid measures distributed by governments during the pandemic.