The good performance that cryptocurrencies had in 2021 has not been reflected so far in 2022. In the first three weeks of January, the largest cryptoactive in the world, the bitcoin, plummeted more than 40 percent. His peers go through a similar situation, the ethereum fell below $3,000, losing more than 8%, with others such as solana, cardano, and binance coin also plummeting.
“Bitcoin has been hit hard by another huge wave of risk aversion in global financial markets, which pushed the price below $40,000 and likely exacerbated investor moves into safe-haven assets,” said Craig Erlam. , senior market analyst at Oanda.
The risk picture is headed by a fear of a tightening of US monetary policy. The Federal Reserve will have its two-day meeting next week and the market expects strong decisions on when the reduction in the purchase of Treasury bonds and the reduction in interest rates will take place.
Risk aversion has strengthened haven currencies. On Friday trading, the Swiss franc rose 0.6%, while the yen gained as much as 0.4 percent.
Another factor that has not helped cryptocurrencies is the growing regulatory threat. Leaders from the UK, Spain and Singapore this week suggested tightening rules on promoting digital assets to inexperienced investors, while the Russian Central Bank on Thursday proposed an outright ban on cryptocurrencies.
“With Russia’s proposal to ban the use and creation of cryptocurrencies, another hard blow to the digital asset may come in the short term since this country is currently the third largest crypto mining territory in the world. So far, the preliminary announcement has had little impact on bitcoin prices, but victory cannot be claimed, as a player as important as Russia can fuel the uncertainty and volatility of this cryptocurrency,” Erlam added.
for those who have cryptocurrency investments, the fall in their prices is a threat to finances. However, for those who are interested in the world of digital assets and have not decided to take action, this is an opportunity.
Experts recommend investing when the prices of a currency, stock or commodity are devalued, in this way, it is most likely that when there is a market recovery, the investment will grow. The bitcoin and their peers had a very good second half in 2021 and many interested in crypto assets did not invest at the risk of losing. This setback is what many were waiting for, especially when the Colombian Financial Superintendence’s pilot for digital asset transactions already has alliances with ongoing operations.
