The cryptocurrency market’s main difference from traditional markets is that it does not depend on central banks. Crypto emission can’t be regulated by banks or the government. That means no one can issue an additional batch of assets to affect the situation in the market.
The crypto market lives by the laws of supply and demand. Some assets have a limited emission, which helps keep the demand for coins. Coins with unlimited emission have increased supply and so lower demand.
Some crypto projects burn tokens to cut supply and keep the demand at the same level.
Why Does Cryptocurrency Price drop?
The market has different trends:
- Bear market (price crypto drops)
- Bull market (price grows).
In 2022, the market experienced a bear trend. It started in the spring of 2022 when the Bitcoin price dropped below $40,000. Important to mention that this asset reached the mark of $68,000 six months before the collapse. Today in early December, the BTC rate is $17. Following Bitcoin, all other crypto assets collapsed. Here are some reasons for crypto falling in 2022:
- FED increased the interest rate by 0,50%
- Overall economic situation in the world
- Looming crisis
- News background was not favorable to investments
- Binance blocks BTC withdrawals because of technical issues.
Crypto Rates Drop in November
In November 2022, another large drop occurred in the crypto market after the news about the FTX exchange was revealed. Investors started to leave the platform in masses and took their money out. It caused the market rates to drop, and we can see the current price of the market leader – Bitcoin, as a result.
The downtrend is the best time for investment. Now you can buy popular crypto assets at a low price and hold them until the next bull trend starts. It is crucial to understand that the next trend will come, and crypto rates will boost again.
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