Crypto Insights Q2 of 2022 - a long road ahead

With Q2 drawing to a close, many of us wonder about the future of crypto markets.

If we think back to November 2021, when Bitcoin hit its all-time highest value of $65,000, we can see how much things have changed.

When we wrote this article, Bitcoin sat at $21,000, nearly 68% lower than where it stood in November! And many other coins suffering 90% decrease from their all time highs.

You might be thinking to yourself, will there be any real bounce back from all this? Is there any way forward from this bearish market?

The answer is yes.

While it's true that some coins will not be able to weather this storm, and some leading crypto investment services will inevitably go under, we are confident that there is light at the end of the tunnel for some, if not most.

Although it's impossible to forecast whether or not things are going to get worse before they get better, we highly advise that you get strapped in for what could be a rough couple of months.

If we've learnt anything over the past two years, it's that even in tough times, crypto can endure (sometimes thrive!), and being a reactionary and selling your coins at a low cost to try to salvage some of your investments is never a good idea.

This dip is by no means the end of crypto; even as we speak, there is news of how crypto is continually being integrated into day-to-day transactions, from buying coffees to paying your rent.

If this really were the death knell of crypto, we would all be hearing it.

But to put things in perspective, let's look at some of the key moments in Q2 and their effect.

Terra collapsed

Leading stablecoin Terra, UST, arguably took the biggest hit, losing almost all its value - going from a value of $100 to just under $2 in three months.

This drop initially surprised most people, with Terra having great initial success when it first appeared on the market.

Many thought that Terra would be a game-changer in years to come and seemed like a solid investment for those looking to secure a stablecoin investment coin for their crypto wallets.

Terra could facilitate trading due to its link to the US dollar but once it failed to maintain its dollar peg back in May it caused its sister coin, Tether to struggle also.

Arguably, this instability was the start of the crypto slump and caused many other coins such as Luna, also in the Terra blockchain, to drop in value, causing widespread market concern. In fact, Terra co-founder Du Kwon, is being brough to justice as his case is revealing that he cashed out $80 million from UST and LUNA each month for nearly three years before their collapse, faking their liquidity.

However, this is not the end of Terra.

All Terra projects will be moving over to Polygon's blockchain after it was announced that a multi-million dollar fund had been set up to move all Terra's projects away from its clearly unsuccessful blockchain.

This announcement is somewhat a silver lining to Terra developers who had big plans for the future and may still hope to salvage something from the crash.

It's unclear at this moment how things will pan out, as the future direction of the crypto market as a whole (as of the end of Q2 2022) still remains uncertain.

However, Polygon's history of helping boost the Ethereum blockchain has proven successful in recent years, so developers and investors can be happy to know they are in safe hands.

Bitcoin's bear outlook

Bitcoin has (as we've already mentioned) taken a big hit, but during the crypto dip - the world's leading crypto-coin was undoubtedly going to bear the brunt.

However, although Bitcoin is undoubtedly in one of the most bearish phases of its life span, this is not the first time we've seen Bitcoin hit such lows only to bounce back. For example, earlier this year, bitcoin slumped into a bearish phase, only to come back with an 11.4% increase in value.

There are many speculations about how Bitcoin will be performing by the end of Q3 2022 without anyone having any definitive answers.

But one thing is for sure, investors and market analysts haven't abandoned the idea that Bitcoin still has a strong future in which the price could bounce back and/or reach new highs.

Granted, we have seen many reactionaries sell their Bitcoin investments for record low prices out of sheer panic.

Still, many believe that when the market value rises back to around $30,000, we will begin to see some stability return.

Celsius stopped withdrawals

Crypto lending service Celsius Network is one of the companies to hit the hardest in recent months, and as of the 12th of June, it announced that it was stopping all withdrawals due to what it declared "extreme market conditions".

This decision resulted from panic selling, which saw the value of Bitcoin dip significantly.

In addition to their ban on withdrawals, Celsius has stopped all social media, leading investors to worry about the company's future. This occurred as Celsius, being a crypto backed lending company, used the customers' assets for rehypothecation, thus, suffering from the downfall. It is worth noting that, despite Nebeus having the same business model, we used the users’ assets for liquidity and own product development, not risking investing them externally.

On a positive note, it was recently announced that leading investment firm Goldman Sachs was looking to raise $2 billion to buy up any assets should Celsius file for bankruptcy.

The deal would allow investors to buy up Celsius' assets and a significantly reduced cost in the hope of reselling once the market stabilises.

The potential deal from Goldman Sachs comes as a welcome surprise to most who have been waiting for stonewall investment firms to take an active interest in crypto markets.

It shows that even in traditional money markets, crypto is still valued as a formidable investment that could see potential returns in the future.

A few final words

Like with any market slump, investors can often succumb to fear about the market's future, leading them to make rash decisions in the hope that they can salvage something, only for the market to bounce back a short time after they sell.

Although we can't pinpoint the end of this current dip, we can say that this is by no means the end of crypto.

As we've seen, a number of stonewall institutions are coming to the aid of many of these crypto firms that have been affected the most, which shows that there is still faith in the future of crypto.

So for all who are reading this, we want you to know that while things seem tough right now, don't do as many have already done and make irrational decisions out of fear.

We, as crypto investors and analysts, have seen high highs, so it was only inevitable that we were going to experience low lows (such is the nature of all investments).

The main problem lies in figuring out when we will see the inevitable bounce back, but as things become clearer and this bearish stage starts to ease, we will undoubtedly begin to see the path back to (and hopefully exceeding) pre-2022 investment values.  

If you'd like to know more about our crypto trading, crypto loan and crypto rental services, you can keep reading more in our blog. If you need any help reach out to our Support team and we can help you make the most out of your crypto investments.

For those who see the true potential in blockchain technologies, you can start investing today with Nebeus.

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