Crypto remains in bear market
The crypto market is not immune to recent inflation and stock instability. In fact, cryptocurrency has been in a bear market for some time. Blockchain companies say it will rid the market of ‘bad actors’.
Cryptocurrencies have grown in popularity quickly, but are now facing price drops. Although crypto was made to be independent from the public market, it has been widely embraced by institutions, Crunchbase writes.
Bitcoin and Ethereum down 50%
After peaking in 2021, prices for cryptocurrencies are taking a dive in the last few weeks. The largest cryptocurrency Bitcoin is down nearly 50 percent in the last six months. And the second largest, Ethereum, is down more than 55 percent.
Crypto prices have been taking a dive.
Moreover, stablecoin TerraUSD collapsed last month. The drop follows the market slump seen in the stock market as of late, especially for tech businesses.
Crypto tied to equity market
Although crypto was supposed to be seperate from the public market, it is just as much impacted by recent inflation and stock instability. However, this ‘may illustrate just how far crypto has come in being embraced’, according to the news site.
“This may illustrate how far crypto has come.”
Namely, the market for cryptocoins has become more regulated and embraced by large institutional investors. For instance, the largest coins Bitcoin and Ethereum are traded by large companies like Tesla and Citibank.
Therefore, crypto is now tied to the equity market. In addition virtual coins are a risk asset, like tech stocks. And with rising interest rates, ‘both tech stocks and crypto have been hit hard’.
‘Bear market will get rid of bad actors’
In response to the recent market dip, Blockchain executives told CNBC it is good and healthy. According to CEO Bertrand Perez of the Web3 Foundation, the bear market will get rid of ‘people who were there for the bad reasons’.
Utility tokens are growing despite market upheaval.
The important question is: will the cryptocurrency market recover? Likely, it will remain volatile until inflation calms down. There is still hope, though. So-called utility tokens have been growing regardless of recent market upheaval. These are meant as payment to use a certain product or service. Therefore they can be compared to crowdfunding.