Why Is Crypto on the Rise: Navigating crypto market trends the cryptocurrency market has experienced recent ups and downs. Even if the world economy presented difficulties in 2023, the market rebounded handsomely, with the majority of the most traded cryptocurrency assets showing negative trends since the start of 2024.
Many investors are left wondering, “What causes crypto to rise and fall?” as a result of the market’s volatility. The rise in cryptocurrency prices is unlikely due to inflation, but macroeconomic variables play a big role in the decline. Other elements that have a big impact on the movements in the cryptocurrency market include the approval of Bitcoin ETFs and the halving of Bitcoin.
Events Shaping Crypto Market Trends
Several significant events have occurred, leading to the emergence of cryptocurrencies. Traders and investors who are building cryptocurrency portfolios must analyze historical price movements and patterns in the market. Nevertheless, one should not rely on predictions or historical success as signs of what is to come.
The first crypto rally started when Silk Road, a groundbreaking dark web marketplace, started accepting Bitcoin as payment. The usage of Bitcoin by early adopters sparked the development of alternative digital currencies, exchanges, and wallets, which in turn caused Bitcoin’s market valuation to reach $1 billion.
An important turning point in the history of cryptocurrency occurred when Vitalik Buterin created Ethereum. This platform allowed alternative cryptocurrencies to gain popularity and diversify the digital asset market. Initial coin offerings (ICOs) and other digital assets with diverse uses proliferated as a result of this invention.
There are more than 100,000 distinct cryptocurrencies, contributing to a market capitalization of $1.14 trillion. In this group, you’ll find things like play-to-earn games, move-to-earn games, carbon credit tokens for environmental projects, SAND and other Metaverse currencies, NFTs, and stablecoins.
Why Is Crypto on the Rise?
The short-term and long-term rise and fall of cryptocurrency prices are affected by numerous factors. The key events that have shaped the growth trajectory of cryptocurrencies can be identified by examining the price charts of these assets over the last decade. Below, we’ll take a look at a few of the main reasons why cryptocurrency is booming.
New Technologies
The beginnings of the bitcoin market can be recalled by tracing its historical roots. Blockchain technology was created in 2009 by cryptography researchers at Bell Labs to guarantee data integrity across a trustless network. A new age in digital banking began with the introduction of Bitcoin, which was made possible by technological progress.
The market increased from $5 billion to more than $500 billion between 2014 and 2016, thanks to the widespread adoption of Bitcoin and Vitalik Buterin’s smart contract innovation. Smart contract applications and boutique token offerings drove the second ICO boom, which propelled the market above the trillion-dollar level. Centralized exchanges, such as One Trading, conducted thorough research before listing tokens in initial exchange offers (IEOs), allowing new projects to swiftly issue tokens through ICOs with the help of smart contracts, all while minimizing risks for customers.
After that, dApps and non-fungible tokens (NFTs) emerged as a result of blockchain technological advancements. Although advancements in technology can fuel market expansion, it is essential to take into account how outside forces, like the media, impact market dynamics. Digital assets, such as cryptocurrencies, have become more commonplace due to the proliferation of these new technologies.
Market sentiments
Among the most unpredictable markets in our history, cryptocurrency stands head and shoulders above the others. Low liquidity and lax regulation have long been hallmarks of the market. The latter, however, is undergoing a slow but steady transformation due to the involvement of institutions and governments. The stock market’s response to tabloid rumors is analogous to the crypto market’s reaction to such events. Because of this, the value of cryptocurrencies is highly sensitive to market mood and speculation, which in turn causes cryptocurrencies to climb in price.
Speculative enthusiasm and a flood of new investors propelled the cryptocurrency market to unprecedented heights in 2017, providing a striking illustration of how market feelings drive the growth of cryptocurrencies. Because of this, cryptocurrency values soared to unprecedented levels in 2017, before plummeting in 2018. The crypto surge is a perfect example of how public opinion may dictate near-term market movements.
A loss of faith in TerraUSD (UST) and its payment system, prompted in part by Binance’s position on the Terra stable peg token, led to the Terra Luna crash, another significant event. Algorithmically pegged stablecoins, such as TerraUSD, alter their supply to keep their price constant, and this meltdown, the biggest bearish trend in the crypto market by volume, shows the dangers of these coins. Skepticism towards these stablecoins became commonplace after the crash.
Bitcoin Halving
A deflationary measure embedded into the Bitcoin algorithm is the halving of the Bitcoin supply. It happens every four years and is marked by a 50% decrease in the block reward. Trends in the cryptocurrency market are significantly influenced by the incident. Looking at the changes in the crypto market after each Bitcoin halving makes it easy to see the price spike of BTC and many other major digital asset movers.
Regulatory Environment
The introduction of the first cryptocurrency prompted authorities to attempt to codify digital assets in a way that would keep up with blockchain technology. Why Is Crypto on the Rise for instance, after Bitcoin and other crypto assets were officially legalized in China in 2013, investment and usage of these assets skyrocketed in the country. The 2013 bullish trend and the Mt. Gox exchange hack were both caused by it.
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Following the publication of the BitLicense document in 2016 by the New York State Department of Financial Services (NY DFS), the market saw an influx of institutional capital. This contributed to a positive trend in 2016 and 2017, but it all came crashing down in 2018 as a result of the SEC’s investigation into initial coin offerings (ICOs).
Long-term vs Short-term market trends
When making an investment decision and determining how long to hold assets, crypto investors must take the timeline into account when trying to comprehend price movements. The following crypto market trends—short-term and long-term price trends—define the relevance of the timeframe and the making of trading decisions.
Monthly, quarterly, and annual time frames are common for long-term price trends. They are impacted by fundamental factors including technical advancements, macroeconomic events, adoption rates, and so on. Hodlers, who choose to hold crypto assets for the long run, look at the price chart monthly to annually to get a feel for the long-term trend of crypto assets.
Market events, news in the sector, and trading activity frequently influence cryptocurrency price patterns in the near term. Why Is Crypto on the Rise these tendencies are beneficial for people who want to make money off of their Bitcoin investments quickly, usually within a few days to weeks. One clear example of how speculators took advantage of temporary shifts in cryptocurrency prices is the 2017 surge.
5 Most Popular Cryptocurrencies Performance
Along with our discussion of the current crypto market’s growth. This blog article should feature a rundown of the best-performing digital assets. Trade any of the assets below with leverage of up to x300 on StormGain.
Among digital currencies, Bitcoin (BTC) stands head and shoulders above the crowd. Investors looking for an asset to capitalize on. In the long run will find it in this asset, thanks to its widespread acceptance. When it comes to market capitalization, Ethereum (ETH) is still second only to Bitcoin among cryptocurrencies. There haven’t been any major swings in the price of the digital asset. Why Is Crypto on the Rise the creation of decentralized applications (dApps) and smart contracts is still spearheaded by Ethereum.
As far as stablecoins go, USDT (Tether USD) is at the top. Despite small but noticeable price swings, it is still the go-to cryptocurrency for those seeking a way to hedge their bets.
The Binance exchange environment is one reason for Binance Coin’s (BNB) widespread acclaim in the cryptocurrency market. Recently, BNB’s price took a small hit, but it is still the fourth most valuable cryptocurrency by market cap. Nevertheless, the overall attitude towards cryptocurrency prices is still positive.
What does the future hold?
It is clear from looking at crypto charts that crypto is experiencing a surge in value today. The cryptocurrency market is showing promising indications of future growth and opportunity. The market’s leading cryptocurrencies, Bitcoin (BTC) and Ethereum (ETH) have investors looking forward to a bright future. Hopes for further gains have been fueled by the recent uptick in cryptocurrency prices. And encouraging news like Bitcoin’s fourth halving and the introduction of Bitcoin Spot ETFs.
Keep in mind that the market can be very unpredictable. The hazards of investing in cryptocurrencies have been highlighted by past occurrences, such as the significant price swings in 2021. Why Is Crypto on the Rise investors can better weather market swings if they take a methodical approach, and spread. Their bets, and employ sound risk management techniques. The crypto market may have a bright future, but smart investors will remain vigilant, flexible, and well-informed.
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