Crypto has increased in popularity over the last few years, with the value of the most well-known cryptocurrencies, such as Bitcoin, soaring. We have witnessed the introduction of many websites and business focused on crypto, with online casinos being a good example. Staking crypto when playing online casino games rather than traditional money has become commonplace and players are choosing to use a dedicated crypto gambling platform for their online casino gaming.
However, it is fair to say 2022 has not been great for crypto and the mid-year review is not as strong as many people hoped. In the early part of 2022, there was over 9,000 different cryptocurrencies available and more than 60 of these cryptocurrencies had a market value of more than £1 million. If we go back to the end of 2021, Bitcoin was trading at over £45,000 for one unit. If we fast forward to May 2022 and the picture is not looking so bright and by the end of the month, two of the lesser-known cryptocurrencies had collapsed.
The major issue with crypto is the more people start to sell their currency, the lower the value of the currency. As soon as there was a hint of doubt regarding crypto and people started selling, it had a knock-on effect on the price of crypto, which started to go down. From January 2022 to July 2022 Bitcoin has reduced in value by over 50% and that sums up perfectly how crypto has fared so far this year.
The question is, why has the value of crypto fallen so dramatically and what does it mean for the future of cryptocurrency?
The overall global climate has had a role to play in the performance of crypto in the first half of 2022. People have not got as much money to spend and are not risking as much money on making investments. Those who still have funds available to invest may be looking elsewhere as crypto is known to be volatile and could be considered too big a risk right now. There is no financial protection from authorities when buying crypto so if your cryptocurrency loses value or you cannot access it anymore because it has collapsed, there is nothing anyone can do to help. There is no intrinsic value to crypto as such, meaning the value of Bitcoin is only worth what people are willing to pay, there are no other factors involved.
It worth noting cryptocurrencies have gone up and down in price before and they will do so again in the future. Some forecasters are telling people to buy now while it is cheap and hope it will rise again soon. In fact, having people buy when it is cheap is what will help to stabilise the crypto market and bring prices back up to the levels they were at the beginning of 2022.
As with any form of investment, there is some risk attached when buying crypto. The first half of 2022 may have been disappointing but things could change dramatically in the second half of the year.