Overall, the market is indicating that the crypto winter may be coming to an end, but while investors may want to start collecting new cryptocurrencies in their portfolios, these three key crypto market expectations should stay top of mind for August.
The digital currency community is carving out a strong niche for itself lately, with the combined crypto market capitalization remaining continuously above the $1 trillion barrier. The market is now seeing considerable price recoveries across the board, with Bitcoin (BTC) breaking through $23,000 and Ethereum (ETH) hitting a 30-day high of $1,774.58.
The crypto ecosystem was nosedived for many reasons, but one of the key contributing factors was the inconsistency in the global economy. The economy is still recovering from the coronavirus pandemic, and Russia’s invasion of Ukraine has further strained the global supply chain. These events have made it difficult for businesses to operate as usual, and this uncertainty has translated into a lack of confidence in cryptocurrencies.
The global economy has been unstable in recent years, with many countries falling into recession. This has included the United States, which has experienced high inflation and low economic growth. With interest rates rising, there is a risk that the stock market and cryptocurrency markets will be negatively affected.
One of the reasons behind Bitcoin’s recent success and growth is that more institutional investors are putting money into digital currencies. This trend can be seen especially in 2021 as it helped propel Bitcoin to an all-time high (ATH) above $69,000.
Although corporations are still investing money into the digital currency industry, it is crucial to remember that their motivations have changed. Now, investors want to finance projects with strong foundations that can accommodate Web3.0–the upgraded version of the internet everyone has been hoping for.
This means that while we will see evidence of Investors’ monetary contributions next month, investment decisions should not be made under the assumption that these funds will create sudden and substantial growth.
The macroeconomic environment will also produce a significant price fluctuation in August. While this is certain to be an overall trend, Ethereum investors must be more vigilant as the near future approaches with The Merge, which will introduce Ethereum 2.0 and create greater price volatility as positions will be opened and closed on a regular basis.