If you’ve paid any attention to cryptocurrency, you might have noticed that the market for this type of currency has taken a nosedive since the beginning of 2022. As of May 2022, bitcoin is trading about 57% lower than it did at its peak in November 2021. Also, the collapse of two major cryptocurrencies (TerraUSD and LUNA) caused some investors to begin to worry.
However, even though billions of dollars of investors’ cash have been wiped out, researchers believe there is no cause for concern just yet. According to investment bank Goldman Sachs, the recent decline is relatively small compared to U.S. household net worth, so any loss in cryptocurrency prices should be minimal. U.S. households own one-third of the global cryptocurrency market, with about 16% of U.S. adults stating they had invested in, traded, or used a cryptocurrency.
Also, big banks and investment firms have largely stayed away from the cryptocurrency craze, thus minimizing their effect on the market. Economists and bankers aren’t worried about the crash of cryptocurrency affecting the market too much, largely because it’s not tied to debt.
If you’re still concerned about cryptocurrency or have questions as to how it can affect your portfolio, it’s best to discuss your concerns with a financial adviser. These professionals can provide you with the guidance and reassurance you need when it comes to investing your money.
Sources: CNBC.com, Investopedia.com, Decrypt.io
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