The second quarter of 2022 will go down in cryptocurrency history as all the major alt-coins lost about 36 percent of their value total value. That fall, along with other recent developments in the world economy, has been of intense interest to bitcoin (BTC) and cryptocurrency traders everywhere. In fact, there are several recent developments in addition to those two that are spurring people from all walks of life to take a second look at investing in crypto, particularly in bitcoin.
Whether you’re planning on amassing some of the world’s most popular alt-coin (BTC) for long-term investment purposes or just want to play the market as a short-term speculator, it’s critical to know what’s happening in the space so you can be ready to take advantage of developments as they arise. If there’s one thing the crypto market is known for, it’s volatility. But, even amid large price swings and roller coaster action, it’s possible for traders and investors to leverage their knowledge and make wise decisions about when and how to acquire and sell bitcoin for maximum advantage.
Getting Ready
If cryptos are one of the assets you intend to place into a portfolio, or if you simply want to play the price swings, it’s vital to review recent events and see how BTC has reacted. Only then is it possible to find opportunities and learn to minimize risks in your own trading account. Anyone who wants to take part in bitcoin trading in South Africa, Europe, Asia, the US, the UK, or elsewhere, should follow local laws about buying and storing BTC. For example, South African citizens are allowed to buy, sell, trade, and hold all major forms of cryptocurrency.
They can even buy it from about a dozen different in-country exchanges. The same is true in nearly every developed nation except Mainland China, where all personal financial dealings are strictly monitored and controlled by the ruling Communist Party. No matter where you reside, it’s worth keeping track of the ongoing COVID pandemic, the Ukraine-Russia war, and rising global inflation rates in order to understand how BTC is behaving. Additionally, review the current opportunities for traders and investors in the space that are direct results of the current state of the world’s economic and political situation.
COVID
The COVID pandemic is not over. Especially in China and much of Northern Africa, there are ongoing repercussions and business lockdowns. However, in most of the world’s developed nations, the easing of the lockdowns had a powerful impact on the price of bitcoin and other leading cryptos. From July to November of 2021, when COVID restrictions were beginning to ease, and businesses began to grow again, BTC’s price doubled. But, several factors from that point forward, until today, caused values to tumble by a vast amount. Now at its lowest point since the opening days of 2021, the big question should be if is there more room for slippage, or will value rebound from now through the rest of 2022?
Ukraine-Russia
The war between Russia and Ukraine has had an indeterminate effect on bitcoin’s pricing. As soon as hostilities broke out, there was a short-term rise, followed by an even larger decrease from early April onward. It’s possible that the conflict and all the related economic disruption are part of the reason BTC is facing an especially difficult Q2. Russian and Eastern European citizens were among the world’s most active participants in the alt-coin sector. But war has a way of slowing economies down and forcing every day working people to temporarily realign their financial priorities.
Inflation
What appeared, as recently as January, to be a transitory influence on the crypto and securities markets, inflation has become entrenched as of Q2 and looks like it might stay around for at least a year. The overall effect is to raise the price of consumer goods, which in turn forces independent traders and investors to cut back on non-essential spending. So far, inflationary pressures have probably forced BTC’s price downward.
For many alt-coin enthusiasts, that means the chance to pick up cryptos like bitcoin at bargain prices. The same thing happens in securities markets after a precipitous price decline. Bargain hunters swoop in and acquire so much stock that the downward trend begins to reverse. Whether this will happen with bitcoin is unclear, but only time will tell. Between Q2 and December 31, there will be plenty of opportunities, all with associated risks, in the BTC market. For investors, the most important weapon is knowledge.
