Crypto Bloodbath: Why next one year will be tough
The crypto market crash has spooked investors as it wiped out global market cap worth over $2 trillion. The largest crypto token, Bitcoin, has fallen by 70% from over $67,000 in November last year to $20,800 levels in June 2022. Similarly, Ethereum, the second biggest cryptocurrency, has fallen from $4,819 to $1,203. The current global market cap of cryptocurrency market stands at $940.96 billion. However, Rajagopal Menon, vice president of the country's largest cryptocurrency exchange in terms of volume, WazirX, says the market is going through its bear phase, and hopes that it will revive in sometime.
"Bitcoin has lost 50% of its value, seven times. It has lost 80% of its value three times in the last 12 years. Like every other asset class, global factors and domestic factors have lead to the great fall in cryptos," says Menon. The idea is, he adds, that this asset class will be volatile because it is traded 365 days for 24 hours. However, he believes that the next one year would be tough for the crypto industry.
The transaction volume on WazirX has been hit too. The platform has recorded 60-70% lower transaction volumes since the beginning of the current financial year. In March, the crypto exchange recorded $45 billion worth of transactions.
People are understandably jittery, says Menon, but what they have to understand that it is a very volatile space and that one should invest with the money that one is ready to lose. "Invest in good coins which have stood the test of time with a long term horizon."