The Bitcoin price and the prices of other cryptocurrencies have recently risen sharply again. Bitcoin is heading towards the $24,000 mark. We see a counter-movement to the massive losses on the market in recent weeks and months. What are the reasons for the strong increases and what can be expected for the next few months? In this article, we explain why is crypto up and how will prices develop over the course of 2022. Stick around till the end to see our list of recommended cryptos to buy 😉
How much are Cryptos rising at the moment?
Cryptocurrency prices have seen extremely heavy losses over the past few months as the bear market kicked in. Bitcoin has lost more than 80% since its all-time high in November 2021, when the price fell below $20,000 in June 2022. Other cryptocurrencies such as Ethereum and Cardano also fell massively in value, losing more than 85% of their value from all-time highs.
In the last few days at the end of July 2022, the prices of cryptocurrencies are increasing again and for the first time in several months, they are seeing double-digit percentage increases within a few days. The Bitcoin price is getting closer and closer to the $24,000 mark. The other cryptocurrencies are also rising sharply again.
Why is Crypto UP?
The big topic of the last few days on the crypto market was the expected increase in key interest rates by the American central bank, the FED. This raised the base rate by 0.75% to get the rising inflation in the US under control.
In the past few months, the FED has already increased the key interest rate, which has led to heavy losses in the crypto market. But now the cryptocurrencies are surprisingly rising again. But we can offer some explanations for this:
- The 0.75% increase in the key interest rate was already expected by the financial markets and therefore did not cause share prices to fall. The cryptocurrencies therefore also showed no weaknesses.
- The higher interest rates give hope that inflation can now be better contained. The policy of cheap money has helped investments massively in recent years, but it has also massively accelerated inflation. A return to sanity in monetary policy will be welcomed.
- Rate hikes could trigger a recession in the near future. However, the hope of a “cleansing” of the markets prevails at the moment. The shock of rising interest rates seems to have been overcome and the markets have adjusted to higher interest rates.
- Cryptocurrencies continue to rise at the moment as stock markets rise. This is the case at the moment. Failure to contain inflation could result in a downward spiral.
- If we don’t see negative reactions in the markets over the next few days, another rally could form and cryptocurrencies could continue to rise.
Why is Crypto UP despite rate hikes?
Normally, interest rate increases mean that risk investments such as Bitcoin and other cryptocurrencies are no longer so popular with investors. Higher key interest rates lead to capital flowing into safe investments.
But the first hike in key interest rates in May 2022 has already set the tone for the new monetary policy. In the first half of 2022, massive amounts of capital flowed from cryptocurrencies to other forms of investment. The large institutional investors in particular sold Bitcoin and other cryptocurrencies massively. This led to the massive losses of the cryptos.
Now the new monetary policy is established and risky assets are adjusted to the new monetary policy. Furthermore, interest rate increases are seen as a positive signal that the central banks are taking the problem of inflation seriously. This ensures a positive mood on the market and leads to risky assets such as cryptocurrencies being bought again.
Will Cryptos RISE again by the end of 2022?
Due to the new positive climate in the market, the market looks bullish again for the next few months. After the massive losses in recent months, a necessary “cleansing” of the market seems to have taken place. Bear markets are natural events that not only make classic financial markets (including crypto markets), healthier.
Now, over the next few months, we could see a rebound effect causing cryptocurrencies to rebound in value. A bear market usually lasts 1-2 years. But even within the bear markets, we have seen stronger price increases again in the past. The second half of 2022 could see such an effect. The positive response to the Fed’s rate hike could be a first sign of a recovery to come.
Are Recessions GOOD for Bitcoin?
Bitcoin and other cryptocurrencies have been under the strong influence of the development of the financial markets in recent months. Bitcoin and other cryptocurrency prices fell when the macro markets also suffered losses. One of the reasons for this is that most investors who trade cryptocurrencies now also trade stocks.
When prices fall, assets are exchanged for cash. This is also the case with cryptocurrencies in the short term. In the long term, however, cryptocurrency prices should rise when traditional financial markets fall. Because cryptocurrencies represent a clear alternative as completely decentralized assets. In the long term, cryptocurrencies could rise in an upcoming recession.
Which Cryptos to BUY in 2022?
If the above factors convince you that cryptocurrencies should increase in the medium and long-term future, then you should start investing in the right cryptocurrencies today. The following coins are particularly recommended:
- Bitcoin : As the oldest and best-known cryptocurrency, Bitcoin should be the basis of every portfolio.
- Ethereum : Ethereum is a massively growing ecosystem and the blockchain is the backbone of most decentralized applications. Ethereum is a leader in NFTs and DeFi.
- Cardano (ADA) : Cardano’s ADA token is an extremely sensible investment. In the long term, Cardano could become the technically best and fastest blockchain on the market.
- Solana (SOL) : Solana’s SOL token also has massive growth potential. Solana has extremely high scalability and is growing strongly, especially in the area of NFTs.
- Dogecoin : Having a meme coin in your portfolio is extremely advisable as these coins have enormous potential for massive price increases. Dogecoin has proven itself over the years.
- Polygon (MATIC) : The Polygon blockchain is a scaling solution from Ethereum and has been growing massively for several months. Polygon’s potential is huge.
- VeChain (VET) : VeChain is still an “insider tip” that has enormous growth potential. VeChain’s blockchain wants to optimize international supply chains.
Where to Buy Cryptos?
The best way to acquire the mentioned cryptocurrencies is through well-known crypto exchanges. There you can buy cryptocurrencies safely and easily. The following exchanges are recommended:
