Latest crypto currency crash and effects on NFT market
The concept of a cryptocurrency refers to a digital asset that relies on a large number of computers connected to a distributed network. The decentralized structure permits them to exist independently of government and central authorities. Back in 2010, when the first crypto launched,it was in cent, and not many people saw the sun rising,but who knows, it will bring a lot of sunlight in the world. Crypto created a storm in the last 10 years with up and down, splitting the believers and non-believers.
A few advantages of cryptocurrencies include cheaper and faster money transfers and decentralized systems that do not collapse at one point. Cryptocurrencies have a number of disadvantages, including price volatility and high energy usage during mining activities.
There was a lot of criticism once it got popular, but eventually, it was already making its way to every network in the world like cancer. Today anyone can buy or sell through the marketplace, and it has widened its prices and investors, including whales. The market faced harsh times back in 2018 when it crashed big time from the price range of $18k to $4k.It was like a bombshell, and many investors were worried about the assets invested in crypto. Over 500 million market capitalization was wiped out.
The Crypto market took some time to recover, and once on its feet, it rides like a horse without any restrictions and Predicament. Along with Bitcoin, which is a key cryptocurrency booming, other cryptos were supported by the general public and got the edge on return investment. The market grew by $1 trillion approx in mid-2021. Currency names Ethereum was the first to recognize NFT market for transactions, and it also got a major boost for transacting transactions for NFT buy and sell and mining. It also touched $5k and looked promising to give the best ROI in recent times. Overall, 2021 year was the finest for the investors.
Starting 2022, with just 3 weeks in the year, crypto saw a major setback due to multiple reasons. The Crypto market started reversing from 28 Dec of last month with small corrections, which experts indicated, but coming into the second week of January, the correction went further down, and bitcoin came under $35k.The augmented went deep for all other cryptocurrencies, and ether was one of them. One of the factors was the tension between the west and east. Ukraine and Russia war being predicted. Also, at the same time, the USA stock market crunched for one week in January.
As per the estimations, A major loss of more than $500 billion in total capitalization hit the cryptocurrency market earlier on Friday. Which were huge, and it impacted a lot of small-scale investors, and the panic sale was seen. Sell contracts were higher than buy contracts, which indicated that the dip would further accelerate, and the third week of January was the worst for the market as it showed the past 18 months low. It was an absolute bloodbath in the marketplace. The prices of the top 10 cryptocurrencies came tumbling down at least 8-10 percent, which was huge. Resistance after resistance was broken, and prices didn’t look stable.
The most important chapter was that even whales were siding from the buys, and no major transactions of buying big orders like 1000 BTC were seen. All the effects were combined of tensions of war, big stock exchanges corrections, and about time after Christmas, which is usually quiet and pale. As per the information, wales which have the capability of turning the market in the opposite side were silent during the 3rd week. The stabilization of the market was far from the chaotic situation. The cryptocurrency market capitalization reached an all-time high of $3.31 trillion. Since then, it has roughly halved since then. Some experts do say that due to the excessive contracts of ETH over the digital token market, the price of BTC has fallen, and the market winds towards the negative approach in terms of BTC.BTC could have held the resistance if the NFT’s market could recognize BTC.
Despite its second-largest market capitalization after Bitcoin, Ethereum has become a major platform for cryptocurrencies, with popular innovations ranging from decentralized finance (Defi) to network functions (NFT). The Ecos were heard in the NFT market as well. Due to the dip in the crypto market, NFT’s were also in the midst of the unknown, and curiosity was born out of nowhere. January contracts of NFT’s sawed the crumbling, and the total contracts contradicted with fewer numbers compared to the first week of January. Even though the crypto market crash was underway, the NFT’s contract had just a mild effect compared to the hole in the wall for crypto. The blame game of shifting the cause started early last week, and pole position to point finger was the NFT market and their marketplace like opensea.
Cryptocurrency tokens are used instead of traditional paper money for commercial transactions because they are identical and fungible.
Past two weeks on opensea, almost eth 57000 in value were engaged in buy-sell contracts and their royalties. Due to the crash of ETH, the contracts on opensea saw a rise of transfer to the exchange, which could be the selling pressure from the investors to get rid of crypto for the time being. It didn’t really affect in terms of NFT market, and as per our analysis, the work of the NFT market was doing decent. Nowadays, other cryptocurrencies are in the market to take a head-to-head with ETH for transactions. The growing scalability of the Ethereum ecosystem may lead users of decentralized applications, or dapps, to avoid searching for faster and cheaper alternatives to Ethereum.
One of the major reasons why the NFT market was not shrinking was that a lot of new NFT projects were planned to publish or go live as per the schedule. The advanced setup and announcement in the market was the key transition of unshakable or little negative effect.NFT creators and artist, backed by the celebrity’s involvement in launching, shows the stronghold of the market and how solid it could stand in difficult times. Overall, the shaft of NFT’s market looks promising in tuff times as per the scenario, and I hope for the best in the near future.
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