So much tension on the world of cryptocurrencies because the news that arrives is certainly very negative.
Bitcoin and other cryptocurrencies have lost a lot since the beginning of the year but the news that most frightens aspiring investors is precisely that of scams and bankruptcies. Let’s try to understand what is happening.
Until 2021, cryptocurrencies had set record after record.
Too many cryptocurrency issues
There had been moments of decline and also moments of tension but basically Bitcoin and other cryptocurrencies they have always continued to grow in value very strongly and very consistently.
If at the beginning the investment in cryptocurrencies was considered something complex and very few believed it, slowly this particular type of investment has drawn an increasingly large number of people. Even in 2021, many important financial institutions have also started advising their customers to invest in cryptocurrencies. Also in 2021, the SEC had authorized the first ETF on the American Stock Exchange focused precisely on Bitcoin.
Bankruptcies and scams
So 2021 closed in the general belief that Bitcoin and other cryptocurrencies were an investment that was now cleared of customs. However, in 2022 things have changed dramatically. Prominent names in the cryptocurrency world have gone bankrupt and very heavy scams have been reported. But if the failures and scams have cast a negative shadow on cryptocurrencies, it was also another element that made this sector tremble. In fact, in 2021 the belief that cryptocurrencies could be a store of value had spread in case of inflation. Leading economists had said that in the event of high inflation cryptocurrencies could be a store of value that should not be underestimated.
There are those who had even compared them to gold from this point of view. This certainly had given great confidence in this sector. But today, just in the moment of high inflation, cryptocurrencies are losing strongly in value. So the unreliability against inflation coupled with excellent bankruptcies and also the many scams are certainly discouraging potential investors. Yet this is certainly not the time when it can be said that the party is over for cryptocurrencies. In fact, many investors continue to believe in cryptocurrencies and believe that this is the time to enter at low prices.