Crypto Market in 2022 and Beyond – A Crisis or a Temporary Stall-back?

The first half of 2022 is proof of how volatile the crypto market is, and it certainly has been having a rough time recently. Although, as traders, we need to be cautious, it doesnt mean that we should stop building and looking for opportunities. At Crypto Caddie, the crypto arm of Squared Financial Group, we are paying particular attention to the regulators and their reaction to the recent events as this might not impact us in the short term but could change our business model in the long term.

• Can you estimate when and how will the crypto market crisis end？

Markets went on a rollercoaster ride lately, and the crypto market crash makes one wonder if the downside will be as steep. I cannot say exactly when the crisis will end, but based on historical trends in the crypto industry, we will come out of this, and more likely stronger. The wildcard is if any harsh regulations will come out and stifle any growth, especially since cryptos are not considered legal tender in most countries.

• What would you recommend to your clients right now, with the uncertainty regarding digital assets？

For the long-term investor, this crisis has created a lot of buying opportunities. For the short-term investor, there are days still ahead for increased volatility. Thats why portfolio diversification is key.

• How do you believe that the world‘s attitude towards crypto is going to change now？ We witnessed the beginning of some sort of ’acceptance, with many governments considering regulation. What do you think will happen now？

I believe there has been a bit of a pause and a “watch and see” attitude from the retail sector. However, many institutional investors are investing at these levels. This is the first time that we have seen a major crisis in the DeFi space, free of government control where there is no one to bail out these DeFi companies as there would be in the traditional space.

This has created a larger share of voice for more regulation and government control. On the other hand, this shakeout was good for the overall market. Short term not so much, but long term, we will come out healthier. I do think we will see more regulation coming out.

• Lets look a bit further. What future do you see for cryptocurrencies in 10 years？

Crypto is the future. The underlying technology is amazing, and there are so many applications for its use; we are just scratching the surface. I believe we will see more central banks have their own stablecoin as well, with 50 of them researching or developing retail CBDC (Central Bank Digital Currency), and the Bahamas, eastern Caribbean, and Nigeria having already launched theirs. It will be exciting to watch as the market continues to grow.

• If theres one thing that needs to be learned from this crisis, what do you think it is？

It is still very early days in crypto, you can do all your homework but because blockchain and DeFi are so new, it is still a very risky investment. I think people got a little too comfortable and invested more than they could afford. Crypto should be part of your portfolio, but only align it to the risk you are willing to take.