Why Is Crypto Crashing And Will It Recover? – What You Need To Know

Why Is Crypto Crashing And Will It Recover? - What You Need To Know


Welcome to Kafycrypto, your number-one crypto news, and Web marketing agency. In this post, we will answer the question “why is Crypto crashing and will it recover?”


Why is Crypto Crashing and will it recover?


Last year was the best year in the Crypto market compared to this year. I could say this because I experienced it myself. Bitcoin and other Crypto coins reached their all-time high leading to so much profit for investors. Those who were involved with crypto will also testify that it was a very good year for them. But can we say the same for this year?

Since the beginning of this year, the Crypto industry has been experiencing a downward trend. There has been a lot of debate among Crypto investors about the Crypto market and if it will recover and bounce back from the recent crash. Many Crypto experts are emphasizing the bear market but how long will it last? Why is Crypto crashing and Is there any chance that it will recover? In this article, I will walk you through Why is Crypto Crashing and will it recover?

Crypto Crashing And Will It Recover

Why Is Crypto Crashing?

One of the reasons why Crypto is crashing today is because of the bearish trend that has been ongoing for a while now. Many people are selling off their crypto assets instead of buying which drives the price of crypto down. 

The global Crypto market was sitting pretty on $1 trillion but now sits at $894 billion. The bear speculation keeps affecting the price of the whole market. Bitcoin which has the largest Market Cap is currently sitting at $16, 715 as of today Dec 16, 2022. This is almost 65% down from its all-time high of $64, 914 as of last year.

Also, Ethereum, the second largest Crypto by Market Cap is currently trading at $1, 181 as of Dec 16, 2022. Again, it is 75% down from its all-time high last year. Other Crypto coins and Altcoins seem to follow the downward trend of bitcoin and Ethereum leading to the whole Crypto winter experience.

A lot of negative news is surrounding the crypto industry right now and this is causing unrest for crypto investors. One of the negative news recently is the FTX’s recent fall. FTX was seen as one of the safest Crypto exchanges. The news of its fall brought shock and has questioned the confidence in the industry. People are now advised to transfer their coins out of CEX (Centralized Exchange) to their wallets.

Binance, one of the largest CEX in the world is also experiencing more of this negative news. Recently there has been a FUD going on about Binance and how they might likely be shot down. This news has made a lot of people withdraw their money from the exchange to their wallets.

There are also many other reasons Why Crypto is Crashing.

Below are some of these reasons;

  • Negative news from the Chinese Government. Recently China has been limiting Crypto-related activities in the country. Considering China is among the leading countries that trade and invest in Crypto, it’s no surprise that such restrictions and limitations would affect the crypto market.
  • Another reason Crypto is crashing is because of negative news, such as hacks and scams. People are tired of losing their hard-earned money to scams posing as real crypto. This is making people lose faith in Crypto hence they are selling off their holdings.
  • People are unsure about crypto right now, hence the general feeling of uncertainty.

Also Read: Why Do Crypto Coin Get Burned?

Crypto Crashing And Will It Recover

Is Crypto Ever Going To Recover?

Yes, Crypto will recover but people are yet to know when. Many Crypto critics are bullish on the future of Crypto recovery saying that the bear market won’t last long. Like any other financial market, this is not the first time Crypto is experiencing a downward trend. 

Cryptocurrency is very volatile and has experienced this before. According to Andreessen Horowitz, a Venture Capital Company, Crypto downward trend has happened in previous years. He went on to talk about how he experienced a Crypto downward trend during the years 2011, 2013, and 2017. He also included that those who leave because of the downward trend usually miss out during Crypto recovery.

Also, the CO-Founder of Polygon Sandeep Nailwal has shared a similar sentiment on Twitter saying that he is bullish on Web3 and the Crypto market bouncing back. Here is the link to the tweets, 

Despite the negative impact experienced by investors, they believe this is just a minor pullback. Many Crypto analysts said the global crypto market is correcting and is expected to enter the bull run soon. But how soon is soon? You can only know if you stick around and not give up.


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When Will Crypto Market Recover?

Tom Loverro, a long-time crypto investor who formerly served on the exchange Coinbase board says that crypto will go even lower in the rest of 2022. 

Tom Loverro claims he has experienced Crypto cycles since 2013. In his tweet, he explained when Crypto winter will end and how to emerge stronger. He says it might take years for Crypto to recover. 

According to Loverro, the ongoing crash isn’t a black swan event, rather it is the result of rising interest rates and inflationary pressures. He thinks that investors will suffer until rates stabilize. 

The former Coinbase board member went on to say that a Crypto bottom is yet to come. He expects that decline in Crypto price will drive the majority of players out. Here is the link to his tweet. 

He went on to advise investors to have enough cash to get through the next 2-3 years and to have enough FAITH to survive the winter without shaking or chasing new and non-crypto directions. He believes that Crypto will come back bigger and stronger.

Which Crypto Will Recover Fast?

Cryptocurrencies with large Market caps are likely to recover fast. Many investors and analysts who experienced the 2018 crash say that it is best to invest in the king of Cryptocurrencies like Bitcoin and Ethereum.

The reason behind this analysis is that Bitcoin has the largest market cap while Ethereum has the second largest Market cap. Although this is not financial advice. Investing in Crypto comes with risk, so only invest in money that you can afford to lose.

Why Is Crypto Crashing And Will It Recover? – Final Thoughts.

Crypto is crashing because it is officially bear season. Cryptocurrency’s downward trend will probably recover. According to industry experts, this is not the first time. It is just a mere pullback and will bounce back.

 If you are looking to invest in Crypto, always bear in mind that it comes with risk. Those in the crypto industry make it look juicy. Always remember to invest what you can afford to lose.

Written By: Patience Raji

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About Abdulmujeeb A. Owolabi 22 Articles
Abdulmujeeb A. Owolabi writes SEO articles for businesses that want to see their Google search rankings surge. With over 5 years of SEO expertise in writing tech, crypto, and finance blogs, you can reach him at hardegboyega@gmail.com