Millennials, Markets & Trends: What is behind chaos in crypto market?

Synopsis

The recent introduction of policies on decentralized assets might have resulted in a drastic drop in value. Nevertheless, even after much uproar and mayhem, the market remains buoyant as investors continue to be confident about the new-age currency.

The cryptocurrency market continues to experience turbulence due to rapid fluctuations in prices and ever-changing adoption intent. From Bitcoin to Dogecoin, Ethereum to Litecoin, the recent sentiments of the decentralized market have largely been affected by geopolitical situations and the Fed rate hikes. That said, factors like demand, supply, regulatory developments and market cap continue to play an essential role in pricing estimates.

The recent introduction of policies on decentralized assets might have resulted in a drastic drop in value. Nevertheless, even after much uproar and mayhem, the market remains buoyant as investors continue to be confident about the new-age currency.

Technological advancement has laid a very comprehensive roadmap for the new-age market enthusiasts. Millennials are more accustomed to the digital way of working. This makes them inclined towards adopting and leveraging on things that exist in the digitalised world. When cryptocurrency made its debut, it did not just propose the idea of an alternative currency. The potential of the decentralised system as opposed to the traditional system of work, and its mere trait of being much more than just a medium of exchange, was something that attracted the millennial group to this market.

However, this experiment followed by the adoption of cryptocurrency came with its own cost. From trivial tweets to far-reaching scams, oftentimes it is the sentiment of the market that has overpowered the game of demand and supply. Yet, it is also this very aspect of the crypto market that captures the interest of young investors.

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View Details » Hanging in the middle: The concern for regulations
While the autonomous nature of cryptocurrency became one of the reasons for its popularity, the unregulated landscape of the industry gave rise to the opposite. Gradually, with the initiation of policies and steps taken to safeguard the interest of cryptocurrency users, the prices did stabilize to some extent. Nevertheless, as uncertainty remains persistent in this dynamic market, a lack of clarity continues to puzzle active investors in this industry.

With the advent of India’s G20 presidency and the initiation to develop Standard Operating Procedures for crypto, the roving sentiment of skepticism might come to a halt. This could also inspire the next generation of investors to try out the new form of currency, as the concern regarding anonymity might encounter a potential solution.

The curious concern for regulations
Diligence is probably one of the most crucial traits any cryptocurrency trader must inculcate while buying or trading. Rewards come with risks. There is no doubt that cryptocurrencies possess substantial potential, but leveraging that potential depends on the diligence of the user. Essential account details like wallet address, trading accounts, and other passwords should never be compromised. While cryptocurrency’s anonymity might provide a new outlook to the traditional view of the transaction, it is the same feature that can land you in chaos only if the personal details are compromised.

Decoding what actually influences the market
Beyond commonly known market factors, crypto prices are also impacted by events occurring in the online space. Understanding and calculating the influence of such factors might be a tedious task due to extreme volatility. But it’s this aspect of volatility that makes the market of cryptocurrencies interesting. The key here is relevant research, the scale of adaptability and underlying elements like technicalities & costs.

While the mayhem continues, the high adoption rate of cryptocurrency also showcases the level of reliance and trust the millennial group has in digital currencies. This market and its underlying technology are the future of digitalization and the new way of making transactions. Cryptocurrency has the potential to lay the very basis of the future monetary system, however, the constantly changing factors affecting the market might take some time to attune.

(Author: Marc Despallieres, Chief Strategy & Trading Officer at Vantage) (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)

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Updated: 11/11/2022 — 21:00