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Why is the cryptocurrency market going down in 2024? – Forbes Advisor INDIA

The cryptocurrency market has seen a slowdown, with the total market cap falling from $2.51 trillion in May 2024 to $1.95 trillion as of August 6, 2024. The market volume in the last 24 hours has dropped by 13.13%. Bitcoin, the largest cryptocurrency, is currently trading at $55,013, down 17.37% in the last seven days and up 8.04% in the last 24 hours. Ethereum, the second-largest cryptocurrency, is trading at $2,447, down 26.53% in the last seven days.

The cryptocurrency market plunged yesterday, losing nearly $367 billion in 24 hours. Major cryptocurrencies like Bitcoin and Ethereum saw substantial declines as investors sold risky assets.

Let’s dig deep into this topic

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How is the cryptocurrency market performing? The cryptocurrency market is going through a major pullback phase, with Ethereum and Bitcoin recording sharp declines. Key market drivers include political uncertainty, geopolitical tensions, economic data, and ETF performance.

CoinSwitch Marketplace Office said that after experiencing one of the biggest cryptocurrency crashes of all time – BTC lost over $250 billion in market cap in a single day – the world’s largest cryptocurrency found support just below $50,000 and rebounded over 14% to trade around the $56,000 mark. The crash was mainly triggered by the escalation of the war between Israel and Iran in the Middle East and the Japanese stock market recording the biggest single-day crash since 1987.

He added, however, that the Nikkei index jumped more than 10% today – after losing 12% yesterday – to recoup most of its losses, which could trigger a fresh rally in global stock markets. Given that this crash can be attributed to the Bank of Japan’s rate hike, it remains to be seen whether this surge will continue.

Mr. Sathvik Vishwanath, Co-Founder & CEO of Unocoinsays the cryptocurrency market is facing its biggest decline since the FTX exchange crash in November 2022, which is in line with the overall decline in the global market. One of the key factors behind this decline is the easing of the yen-dollar swap. Traders typically borrow in low-interest currencies like the yen and invest in higher-yielding assets.

He also added that the recent interest rate hike by the Bank of Japan made these trades less profitable, leading traders to close their positions. This caused a massive sell-off in both the stock and crypto markets. Over $1 billion was liquidated in the crypto sphere, mostly from long positions, further accelerating the market’s downward trajectory.

Mr. Himanshu Maradiya, Founder & Chairman, CIFDAQ Blockchain Ecosystem Ind Ltdsaid that “the recent sharp decline in the cryptocurrency market, with major assets like Bitcoin and Ethereum down more than 10%, can be largely attributed to the Bank of Japan’s decision to raise interest rates. This decision had a significant impact on carry trades, a strategy where traders borrow in low interest rate environments, such as in Japan, and invest in higher-yielding assets, including cryptocurrencies.

The Bank of Japan’s first interest rate hikes in 17 years have caused the yen to rise, leading to an “unwinding of carry trades.” In addition, rising geopolitical tensions and growing concerns about a potential recession in the United States have further exacerbated the decline in cryptocurrency markets. The combination of these factors has created a challenging environment for cryptocurrencies, which are particularly sensitive to changes in investor sentiment and macroeconomic conditions.

He added that the current correction phase, driven by the Bank of Japan’s monetary policy shift and the resulting appreciation of the yen, highlights the interconnected nature of global financial markets. Despite short-term volatility, the fundamental value propositions of cryptocurrencies remain strong. As the macroeconomic landscape stabilizes, we expect the cryptocurrency market to recover and grow steadily.

As of August 6, 2024, the Fear and Greed Index stands at 34, indicating a state of fear.

Bitcoin, the largest cryptocurrency by market cap, has fallen by nearly 17.38% in the last seven days and is trading at $55,004 as of August 6, 2024. On the other hand, Ethereum has fallen by nearly 26.85% and is trading at $2,447.

Bitcoin’s price has plummeted, dropping below $50,000 on Monday, while Ethereum has fallen by nearly a third to $2,340 over the past week. Altcoins haven’t escaped the rout: Cardano has plunged by about 27%, Solana by 36%, Dogecoin by 34%, XRP by 23%, Shiba Inu by 30%, and BNB by 25.7%.

The cryptocurrency massacre appears to be part of a broader flight to safety. After last week’s worse-than-expected unemployment report, the economy has entered a technical recession, according to a measure called the “Sahm Rule.” It marks the start of a recession when the three-month average of the unemployment rate increases by at least half a percentage point from its lowest point last year.

In response, the S&P 500 fell nearly 2%, the Nasdaq fell 2.5% and the Dow fell 1.5%. However, given the bloodbath that took place overseas on Monday, this could be just the beginning of a broader rout.

Is investing in cryptocurrencies safe? The cryptocurrency market has seen the good and the bad of the market, whether it is the post-Russia-Ukraine effects, the Terra-Luna crash, the collapse of FTX or the tightening of tax regulations, it has witnessed the most violent storms in recent years.

The year 2023 has given a new beginning to the cryptocurrency world, showing positive signs of recovery. Cryptocurrency investors believe that in situations like this, investing in stable digital currencies like Bitcoin and Ethereum in SIP format is a safe choice. Cryptocurrency experts consider that in the overall portfolio, investors should simply consider investing only 5% exposure to cryptocurrencies. The most important thing is to invest only a tiny amount and not all your savings, as the market is very volatile and there are chances that you might lose all of it.

Steps to Invest in Indian Cryptocurrency Market Step 1: Select the best cryptocurrency: Choose a cryptocurrency that you want to invest in. Like any other asset class, cryptocurrency has its own fundamentals and different blockchain networks supporting them, intrinsic value, and mining techniques. Make sure to do your research and analysis before investing as the cryptocurrency market is highly volatile. Choose an exchange that is registered with the FIU.

Step 2: Select a Cryptocurrency Exchange: After choosing a cryptocurrency, it is time for you to find a perfect cryptocurrency exchange for you. It is necessary to have a working account in a cryptocurrency exchange that will help you buy and sell cryptocurrencies. Check out our article on the best cryptocurrency exchanges in India.

Step 3: KYC: Once you have selected a cryptocurrency exchange platform, you need to register by providing personal information such as your name and address and complete all the KYC formalities. After creating your account, you are ready to invest in cryptocurrency.

Step 4: Choose your payment method: To buy cryptocurrency, you need to select a payment option that suits you. You can choose peer-to-peer payment method, bank transfer, online payment method, or a crypto wallet.

Step 5: Buy Cryptocurrency: After adding funds to your account, you can easily buy the cryptocurrency of your choice. Just tap on the “buy” tab and you can easily buy the cryptocurrency of your choice.

Step 6: Storage: After purchasing cryptocurrencies, remember to store your currencies safely as they are not regulated and you need to keep them in a safe place as there is always a risk of hacking or theft. You can check out the cryptocurrency storage options here.

Step 7: Selling cryptocurrencies: This is as important as buying them because it allows you to make money by investing. You can sell the cryptocurrency in the same way you bought it, just click on the “sell” tab in your wallet. You can sell your cryptocurrency investment completely or partially depending on your choice, but remember to account for your profits in due time.

Featured Partners

Legacy

Over 2 Million Investors Trust Mudrex for Their Cryptocurrency Investments

Security

Mudrex is a Government of India recognized platform with 100% insured deposits stored in crypto wallets

Costs

Enjoy zero cryptocurrency deposit fees and the best fee rates in the industry.

Multi-Award Winning Broker

Listed in Deloitte Fast 50 Index, Best Global FX Broker 2022 – ForexExpo Dubai October 2022 and more

Best in class investment offering

Trade over 26,000 assets with no minimum deposit

Customer Support

24/7 dedicated support and easy registration

Invest carefully, your capital is at risk

Conclusion It is wise to observe the cryptocurrency market with caution in an uncertain environment and slow recovery of macroeconomic situations in the world. Do not make rash decisions as this is the right time to observe the market closely and analyze it.

We may never know, but observation will eventually help investors make smart decisions and might have a preferred digital asset at a fair value, once the chaos situation has completely subsided.

www.cifdaq.com

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Balancing centralized and decentralized economies: Journey through financial evolution

The integration of centralized and decentralized systems will play a pivotal role in shaping the next chapter of our economic story. This journey requires a thoughtful approach.

In the grand tapestry of human progress, few threads are as intricate and transformative as the evolution of economic systems. Imagine a world where financial systems are as diverse and dynamic as the cultures that shape them—where traditional centralized structures coexist with innovative decentralized frameworks. This is not a far-off fantasy but a reality that is gradually unfolding before our eyes.

Age of centralization Picture the centralized economy as a grand old library, its towering shelves lined with meticulously organized books. Each volume represents a piece of the financial puzzle, carefully cataloged and controlled by the librarians—financial institutions and governments. This system has served us well for centuries, offering stability, structure, and a familiar order to our economic interactions.

Centralized economies are characterized by their centralized control, where a few key institutions wield significant influence over the financial landscape. This structure allows for coherent regulation, standardized procedures, and a degree of predictability that has underpinned economic growth and stability. Central banks, government agencies, and large financial institutions play crucial roles in ensuring economic stability through policies, regulations, and interventions.

However, as the pages of this story turn, cracks in the old library's foundation begin to appear. The rigidity of centralized systems can sometimes stifle innovation, limit access, and create barriers for those outside the traditional economic sphere.

It’s akin to a library where not everyone can access the books they need, despite the orderliness of the shelves. Centralized systems often face challenges such as bureaucracy, inefficiencies, and susceptibility to corruption, which can hinder progress and adaptability in a rapidly changing world.

Rise of decentralization Enter the world of decentralized economies—a realm akin to a vibrant marketplace, bustling with activity and brimming with possibilities. Here, the rigid structures of the old library are replaced by a dynamic, open bazaar where every participant has a voice and a stake.

Decentralized economies leverage blockchain technology and digital innovations to create a more inclusive and transparent financial environment. In this marketplace, there are no gatekeepers; instead, transactions and interactions are governed by algorithms and smart contracts. The emphasis is on accessibility, efficiency, and empowerment. Blockchain technology enables peer-to-peer transactions without the need for intermediaries, reducing costs and increasing transaction speeds.

Imagine a bustling street market where people exchange goods and services without the need for intermediaries. Transactions are direct, and the marketplace is ever-evolving, with new vendors and offerings emerging continuously. This is the essence of decentralization—breaking down barriers and allowing for a more fluid and democratic exchange of value.

Decentralized systems can foster innovation and creativity, as participants have the freedom to develop new solutions and services without centralized approval or control.

Balancing act The real challenge and beauty lie in balancing these two distinct yet complementary economic paradigms. Centralized systems offer stability and a proven track record, while decentralized systems promise innovation and inclusivity. The key is not to choose one over the other but to find a harmonious integration where both can thrive.

Intersection of two worlds At the intersection of these two worlds lies a dynamic and evolving landscape. This is where the strengths of centralization meet the innovations of decentralization, creating a hybrid model that harnesses the best of both. It is in this hybrid model that we find the potential for a truly inclusive and efficient financial system.

Centralized systems can provide the regulatory framework and stability necessary for large-scale operations, while decentralized systems can introduce the flexibility and user-centric innovations that drive inclusivity and engagement. Together, they form a balanced ecosystem that can adapt to changing needs and emerging opportunities.

A hybrid model can leverage the strengths of centralized oversight for security and stability, while harnessing the innovative potential of decentralized technologies to enhance efficiency and user experience.

Challenges and opportunities There are some challenges that need to be overcome.

Security vulnerabilities One of the significant challenges in the decentralized landscape is security. Decentralized platforms, particularly those based on blockchain technology, are still in their nascent stages. This immaturity often results in vulnerabilities within complex smart contracts, leading to hacks and exploits.

While centralized systems are not immune to security breaches, they typically have more established protocols and regulatory oversight to mitigate such risks. Security measures in decentralized systems need to evolve rapidly to address these vulnerabilities and protect users.

Regulatory challenges Regulation is a double-edged sword in both centralized and decentralized economies. Centralized systems benefit from a well-established regulatory framework that provides a safety net for users and ensures market stability. However, over-regulation can stifle innovation and slow down progress.

On the other hand, decentralized systems often operate in a regulatory gray area, which can lead to uncertainty and increased risk for participants. Finding a balanced regulatory approach that encourages innovation while protecting users is crucial. Governments and regulatory bodies need to work collaboratively with industry stakeholders to develop frameworks that balance innovation with security and compliance.

User protection In centralized systems, user protection mechanisms such as deposit insurance and fraud protection are well-established. These protections offer a sense of security to participants. In contrast, decentralized systems place the onus of security and responsibility on the users themselves. This can be empowering but also risky, as users must manage their private keys and understand the intricacies of smart contracts.

Education and user-friendly interfaces are essential to bridge this gap. Enhancing user protection in decentralized systems through better security practices and educational initiatives is essential for broader adoption.

Smart contract issues The foundation of decentralized systems is the smart contract—self-executing contracts with the terms of the agreement directly written into code. While revolutionary, they are not without flaws. A single bug or vulnerability in a smart contract can lead to significant financial losses.

Ongoing development, rigorous testing, and peer reviews are necessary to enhance the reliability and security of these contracts. Establishing industry standards and best practices for smart contract development can help mitigate risks and improve trust in decentralized applications.

High volatility The volatility of cryptocurrencies and decentralized assets is a well-known challenge. External factors such as regulatory news, geopolitical events, and market sentiment can lead to rapid price fluctuations. Centralized systems, with their controlled environments, tend to exhibit more stability. However, they can also be affected by economic policies and global events.

Balancing the stability of centralized systems with the dynamic nature of decentralized assets is essential for a robust economic ecosystem. Strategies such as stablecoins, which are pegged to stable assets, can help mitigate volatility and provide more predictable value in decentralized economies.

Looking ahead As we look to the future, the integration of centralized and decentralized systems will play a pivotal role in shaping the next chapter of our economic story. This journey requires a thoughtful approach, one that respects the strengths of each system while embracing the possibilities of their convergence.

The balance between centralized and decentralized economies is not a simple choice but a nuanced and dynamic process. It is a journey of continuous adaptation and innovation, where the goal is to create a financial ecosystem that is robust, inclusive, and responsive to the needs of all participants.

As we navigate this evolving landscape, the insights of the past and the innovations of the present will guide us toward a more balanced and prosperous future.

Embracing middle path To achieve this balance, stakeholders in both centralized and decentralized systems must collaborate and learn from each other. Centralized institutions can adopt decentralized technologies to enhance efficiency, transparency, and user engagement. Meanwhile, decentralized platforms can incorporate elements of centralized oversight to ensure security, compliance, and user protection. This collaborative approach can lead to a more resilient and adaptable financial ecosystem.

Case studies and real-world applications There are several examples. Some of them are:

Central Bank Digital Currencies (CBDCs) One of the most promising examples of this balance is the development of Central Bank Digital Currencies (CBDCs). These digital currencies, issued by central banks, leverage blockchain technology to offer the benefits of decentralization while maintaining the regulatory oversight and stability of centralized systems.

CBDCs can enhance financial inclusion, reduce transaction costs, and improve the efficiency of monetary policy implementation. Countries like China, Sweden, and the Bahamas are already exploring or implementing CBDCs, showcasing the potential of a balanced approach.

Decentralized Finance (DeFi) and Traditional Finance (TradFi) integration The integration of Decentralized Finance (DeFi) and Traditional Finance (TradFi) is another compelling example. DeFi platforms offer innovative financial services such as lending, borrowing, and trading without intermediaries, leveraging smart contracts and blockchain technology.

However, the integration of DeFi with traditional financial systems can enhance liquidity, stability, and user trust. Hybrid platforms that bridge DeFi and TradFi can provide users with the best of both worlds—innovative financial products and the security of regulated environments.

Conclusion In conclusion, the evolution of economic systems from centralized to decentralized and the ongoing efforts to balance them is a testament to human ingenuity and adaptability. As we continue to explore this uncharted territory, the lessons learned from both systems will be invaluable. The future of finance lies not in choosing sides but in integrating the best of both worlds to create an economic landscape that is fair, inclusive, and resilient.

Additional insights The potential for cross-border transactions and remittances in a balanced economic system is immense. Decentralized systems can facilitate faster and cheaper international money transfers, bypassing traditional banking intermediaries. This can significantly benefit individuals and businesses in developing countries, enhancing financial inclusion and economic growth.

-- Himanshu Maradiya, Founder and Chairman of CIFDAQ.

www.cifdaq.com

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Analyst: Shiba Inu Poised to Skyrocket 696 Percent by 2024

The Shiba Inu (SHIB) token, has attracted significant attention in the crypto community due to its potential for substantial price movements.

CIFDAQ Blockchain Ecosystem Chairman Himanshu Maradiya has made a bold prediction, suggesting that SHIB could reach the $0.0001 level by 2024.

This ambitious target represents a 696 percent increase from the current price of US$0.00001436, attracting the interest of investors and enthusiasts.

Shiba Inu Ready to Take Off Maradiya's optimism doesn't stop there. He believes that SHIB can provide even greater gains, projecting a peak target of US$0.0003 by the end of this year or 2025 at the latest.

Cryptopolitan reports that, this prediction comes as Shiba Inu price is in a recovery phase after a recent drop. Despite the less than satisfactory performance, Shiba Inu price has increased by 2.49 percent in the last 24 hours.

This increase gives hope to investors who have seen the token's price drop to US$0.00001087 just last Monday.

Since then, SHIB has recovered nearly 30 percent, mirroring a broader recovery in the crypto market after a major sell-off last weekend that briefly pushed Bitcoin below $50,000 and Ethereum below $2,500.

As Shiba Inu continues to recover, experts have offered differing views on the token’s future. Some, like Maradiya, remain bullish, suggesting that Shiba Inu’s retracement towards a key moving average (MA) suggests that bulls are trying to make a comeback.

Trading View data supports this view, showing that if SHIB can break and close above this MA, it could pave the way for a rally towards the $0.000020 level . This would be a strong signal that the market has rejected lower levels and is ready to move higher.

However, not all experts share this optimism. Utkarsh Tiwari, an executive at the KoinBX exchange, offered a more cautious perspective.

In an interview with Forbes, Tiwari stated that while widespread bullish sentiment could push Shiba Inu to $0.000066 by the end of the year, the token could also face significant bearish pressure.

He warned that this bearish momentum could cause Shiba Inu to fall below the critical five-zero threshold, a sentiment echoed by popular prediction platform Telegaon.

Their analysts believe that the token may only reach a high of US$0.0000601 in 2024, highlighting that Shiba Inu came close to reaching this price in March when it briefly touched above US$0.000045, only to plummet by 32 percent since then.

Adding to the differing views, analysts at Changelly Exchange have further reduced expectations.

They predict that Shiba Inu may struggle to break above the $0.0000187 level this year, reflecting a more conservative view on the token's price movement.

www.cifdaq.com

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Analyst Tells Forbes Bitcoin Could Hit $1,000,000 as Soon as Next Year

Bitcoin (BTC) has endured a tumultuous period over the past few weeks, with its value experiencing significant swings. After peaking at around $70,000 in July, the cryptocurrency plunged below $48,000 by August 5th. However, it has since demonstrated signs of resurgence, rebounding to approximately $62,500. Several analysts are making bold predictions about Bitcoin’s future trajectory amid these volatile shifts.

In a recent interview with Forbes, Himanshu Maradiya, founder and chairman of CIFDAQ Blockchain Ecosystem, presented an eye-catching forecast, suggesting that Bitcoin could potentially hit $1,000,000 by 2025. While this prediction might seem audacious, Maradiya believes several factors could drive Bitcoin towards this milestone.

Notably, the pundit pointed to the increasing adoption of Bitcoin, the approval of Bitcoin ETFs in various countries, and rising concerns over fiat currency devaluation as key drivers. The pundit also emphasized the recent halving event on April 20, 2024, which reduced the rate at which new Bitcoins are created, as another factor influencing his predictions. Historically, Bitcoin halvings have led to significant price increases due to reduced supply.

“Predicting a $1,000,000 Bitcoin might appear overly optimistic, but the increasing institutional interest and regulatory support for cryptocurrencies make this scenario plausible,” Maradiya stated.

Elsewhere, former BitMEX CEO Arthur Hayes recently suggested that Bitcoin might spike to $1,000,000 in the current market cycle. In an interview with DL News last week, Hayes attributed this potential surge to global financial shifts and high debt levels. “The Bitcoin price in this cycle is going to go very, very high. Hundreds of thousands of dollars, maybe $1 million.” Said, Hayes. “We’re entering a period of significant change in the global monetary system.”

Elsewhere, Rajagopal Menon, Vice President of India’s largest crypto exchange, WazirX, commented on Bitcoin’s potential. Menon believes Bitcoin could initially target between $90,000 and $100,000 before the year ends.

“The $100,000 mark represents a significant psychological barrier,” Menon said. “Bitcoin may experience substantial resistance around this level, which could affect its short-term performance.”

Veteran trader Peter Brandt has also echoed a bullish outlook, predicting that Bitcoin could reach $150,000 by the end of 2025. Like Maradiya, Brandt’s forecast is based on historical trends associated with Bitcoin’s halving cycles, often leading to bullish market phases. However, Brandt also cautioned that there is a 50% chance Bitcoin might drop below $40,000 before the effects of the latest halving fully materialize.

www.cifdaq.com

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Shiba Inu’s price could achieve a remarkable 696% surge in 2024

The chairman of the CIFDAQ Blockchain Ecosystem, Himanshu Maradiya, believes that Shiba Inu could attain $0.0001 in 2024. This is a 696% surge from the current price of $0.00001436.

According to Maradiya, the meme coin could deliver more substantial returns by next year. He highlighted that SHIB enthusiasts can hope for an upper target of $0.0003 by this year or, at most, 2025.

In the past couple of days, Shiba Inu’s price has been lackluster as it navigates the recovery phase following a recent downturn. Shiba Inu’s current price shows a 2.49% increase over the last 24 hours. 

However, since its plunge to $0.00001087 last Monday, the meme coin has rebounded by almost 30%. This is because the entire crypto market experienced a sell-off last weekend, which briefly drove Bitcoin below $50k and Ethereum back below $2,500.

As Shiba Inu continues its recovery, several experts are reviewing the potential future directions for the SHIB price in a less bearish market. Some analysts are pessimistic about SHIB Meanwhile, Utkarsh Tiwari, an executive officer at the KoinBX exchange whom Forbes also interviewed, is less optimistic about Shiba Inu’s performance for the remainder of 2024.

Tiwari argued that widespread bullish sentiment could drive SHIB to $0.000066 by the end of this year. Yet, he noted that bearish momentum could cause Shiba Inu to crack the five-zero threshold.

Popular prediction outlet Telegaon shares this sentiment. Its analysts believe the meme coin may only hit a maximum of $0.0000601 in 2024. Notably, the meme coin came close to this price channel in March this year when it had a value above $0.000045. However, Shiba Inu is far from the region, and the price has dropped by 32%.

On the other hand, analysts at Changelly Exchange highlighted that Shiba Inu may not surpass $0.0000187 this year.

www.cifdaq.com