London, UK — The digital currency investors can finally take a breather. The cryptocurrencies are ultimately finally recovering from their brutal crash. The last hit was gruesome, it shaved off 30% of the value of major coins like Bitcoin and Ethereum, resulting in dropping in the price that was never seen before 2022.
However, cryptocurrency never disappoints, time attests to this. Over the last seven days, Bitcoin has jumped up to more than 10% and stands at the value of $21,013 at the time of writing. Surprisingly Ethereum has reclaimed even more value, surging over 19%, with a current value of $1,189.
Let us add to your happiness, Polygon’s week was even better, according to Santiment it rose almost 59%, buoyed by six weeks of whale accumulation.
Our expert broker, Marek Herman, at Blue Royal Investments says, “If you observe, you will notice that almost every top 30 cryptocurrency has managed to reclaim its value by a double-digit percentage over the weekend except for Cardano, which only jumped 4%. It’s not bad news for Cardano investors, experts have predicted that it will increase in value very soon and that too by huge numbers, especially after its massive performance improvement. ”
According to data Cardano has reached $0.4845 and TRON has risen by 8% to $0.06445.
Volatility of Crypto
As compared to the past six months, the week has been calmer in terms of news, which could be seen as a reason for assisting the crypto market’s upswing.
The Annual Economic Report 2022 put forward by Bank for International Settlements (BIS) on Tuesday has revealed two flaws in crypto that makes it notoriously volatile.
- Nominal Anchor
We asked Marek Herman to assist us in understanding these two factors and their correlation with the crypto market. He says,
“Nominal anchor” basically means stablecoins, which correlates their value to paper money. The existence of these stablecoins suggests the extensive need in the crypto sectors to hoard the credibility offered by the unit of account issued by the central bank.”
The report by BIS also argued that cryptocurrencies are still challenging the dominance of the central bank in offering a unit of account for the economy. According to the report, the fact that stablecoins must import the credibility of central bank money indicates the major structural drawback of cryptocurrency.
Marek Herman comments, “I can see where BIS is coming from, the stablecoins are often less stable than their issuers claim, so one can say that they are at best an imperfect alternative to sound sovereign currency. But what I like about cryptocurrency is that it is a decentralized system so all the money or power is not accumulated by a handful of people.”
Another factor/concern brought forward by the BIS report is the fragmentation of the sector, more cryptocurrencies are being launched and each is competing to dominate the market. This can be seen as the biggest flaw of the crypto market as a basis for the monetary system.
This report further explains the utility of blockchain technology for central bank digital currencies and deemed smart contact technology as one of the major advantages that will allow transactions between financial brokers that go beyond the conventional medium of central bank reserves.
The United States and European Union head honchos, Jerome Powell and Christine Largade, separately talked about the regulation of cryptocurrency and the risk it might impose. Marek Herman comments, “Crypto market is growing rapidly, it is normal for people in the finance world to feel threatened by the unknown future, but if you take my word, cryptocurrency does not pose any immediate threat.”
The Government on Crypto
Last Wednesday, U.S congressman Jim Himes forwarded a proposal that suggested that the country should implement a central bank digital currencies. He claimed that digital currencies can safeguard the dollar’s role as the world’s leading reserve currency.
Marek Herman adds, “It’s about time that the government leading countries embrace this innovation, the further they delay it the more they fall behind both foreign governments and the private sector. So the government should also consider and move forward with digital currencies, this will also add credibility and help improve the value of the coins.”
The good news is that Powell told the House Committee on Financial Services that they will seek guidance from the Feds to implement a central bank of digital currency. This will be a huge step in the world of Digital Currency and one can imagine that it will positively impact the value of the coins too. It can even be said that the price might outdo all predictions that experts have made about the near future. So the takeaway is that more good news is expected for the crypto market.
Disclaimer: Our content is intended to be used for informational purposes only. It is very important to do your own research before making any investment based on your own personal circumstances. You should take independent financial advice from a professional in connection with, or independently research and verify, any information that you find on this article and wish to rely upon, whether for the purpose of making an investment decision or otherwise.