In May 2023, the crypto market performed poorly in comparison to previous months and years
Cryptocurrencies are influenced by a range of factors such as regulatory changes, economic conditions, market sentiment, geopolitical events, technological advancements, and investor behavior. These factors ultimately impact the supply and demand dynamics of cryptocurrencies and can contribute to price fluctuations. This article specifically delves into the potential reasons for the crypto market down in June 2023.
Following the FTX meltdown in 2022, credibility in such currencies was decimated, and the market shifted completely downward, with no indications of abating. Nevertheless, 2023 provided a new opportunity for major digital currencies such as Ethereum and Bitcoin, and the crypto market has gradually begun to turn green as a result of the improved socioeconomic situation and decreasing prices.
Rising interest rates: To combat inflation, the Federal Reserve has been rising interest rates. Borrowing money has become more expensive as a result, leading to a decrease in investment in riskier assets such as cryptocurrency.
Lawsuits: The SEC lawsuits against cryptocurrency giants Binance and Coinbase accuse them of regulatory infringements and acting as unregistered brokers. The actions spark debates in the crypto sphere, raising concerns about Wall Street’s potential dominance and the classification of certain cryptocurrencies as securities. The legal campaign signals a major shift in the regulatory landscape of the crypto industry, highlighting the need for a clear, modern, and inclusive regulatory framework.
Geopolitical instability: The ongoing conflict in Ukraine, as well as the danger of a US recession, have caused a great deal of uncertainty in the global economy. As a result, investors have sold off riskier assets such as cryptocurrencies.
Regulatory repression: Cryptocurrencies are being targeted by governments all around the world. This has made buying and selling bitcoins more complex for investors.
Crypto experts say that in this type of circumstance, experienced investors may consider investing in stable and firm digital currencies such as Bitcoin or Ethereum. In May 2023, the crypto market performed poorly in comparison to previous months and years, as it encountered various headwinds and hurdles that hindered its development potential. However, other crypto experts feel that this is merely a passing phase and that the crypto market will soon recover and hit new highs.
