The fifth episode of Technext’s podcast series-Tech bytes, themed “Crypto winter and the realities of crypto investments”, featured discussions on the prevailing fluctuations and environment around crypto trading and the possibilities of gains and losses in investment.
In this new episode of tech bytes, the hosts started with conversations on trending issues for the week, including African unicorn Interswitch raising $110 million for more expansion possibilities in the continent, Ethiopia becoming one of the six countries in Africa to launch 5G network services, the continuous investment of El Salvador in the cryptos after the President bought more coins amidst market crash and lastly, Google’s unveiling of its new products.
This episode of tech bytes featured an expert on the topic of interest (crashing prices of bitcoin and the realities around it), Jonathan Emmanuel. He is the founder and CEO of Zenith chain, a crypto exchange platform. who shared some light and words of advice for crypto traders.
You can listen to the full episode below:
Excerpts from the conversation
But, in case you do not want to listen to the full episode first, please find below a summary of the convo just for you:
The main conversation focused on the continuous crash of the bitcoin price which attained its lowest since July 2021, hitting lower than $30, 000 and dropping by more than 50% from October last year.
Jonathan Emmanuel who joined the Tech Bytes conversation on the call explained the “investor’s expectation” of the possibility of a dip has been long in the works. He indicated that a significant dip in prices has not happened since 2017. “So, it is always expected. It’s long overdue”, he said.
According to him, what triggered the dip in prices of coins stems from an announcement from the Federal Reserve of America of an increase in the interest rate owing to the fear of the possibility of a recession. Hence, investors anticipating a volatile market for credit and falling prices began to sell. The deluge of demand in ratio to supply is the cause of the drastic crash in prices.
Another reason for the crash, according to Jonathan is the phenomenon of Terra. This is a crypto platform trading a stable coin called the UST. Terra helped keep the UST from fluctuating by floating a native coin called luna. This transaction was powered by the sale of about $500,000 worth of bitcoin. This isn’t ideal as a stable coin ought to be backed by US Dollar.
It was really really a bad decision, because a stable coin is suppose to be backed by the dollar, not bitcoinJonathan Emmanuel – CEO Zenith chain
In sum, so when the Federal Reserve increase the interest rate, bitcoin dropped, thus causing other stable coins to de-pegged thus crashing the Terra, representing a whole lot of chain reactions for cryptos in general.
Bitcoin won’t be touching 40k anytime soon, due to speculations of a recession in the U.S. hence, the situation is not likely to remedy soon
On if bitcoin is likely to become immune to shocks from Federal Reserve policies and discretionary statements, he stated that fear and greed level has to reduce according to the bitcoin index and trust the coin.
The rate at which the blockchain industry is going is even faster than the internet. The trajectory for both shows the blockchain technology grew faster.Jonathan Emmanuel
He advised that investors shouldn’t sell off their coins as there is hope for a rebound, stating more research is to be done on coins to invest in going forward to help decisions form investment plans.
He believes cryptos have the potential to overtake central tenders due to the personal control and certainties in holding them rather than in conventional banks where Government’s actions and policies would affect them coupled with unnecessary charges and restraints imposed on amounts and transactions by the central bank.
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