Image Source: Getty Images
The cryptocurrency market celebrated its banner year in 2021. Digital currencies have experienced significant price increases. These assets have also become prominent against the backdrop of celebrity support and aggressive advertising campaigns. Unfortunately, many investors who have been in the fight over the past year and a half are now paying for that optimism. Today I would like to discuss whether it is worth investing in crypto space at this stage. Let’s dive.
Top cryptos like Bitcoin and its companions are moving in 2022
Bitcoin (CRYPTO: BTC)Maximum Cryptocurrency In terms of market capitalization, its value has been crushed so far this year. In the first month of summer, it fell to a 52-week low of $ 17,601. Ethereum (Cryptography: ETH)Another top digital currency, but its value has plummeted in recent months. In fact, since the heyday of the 2021 rally, the broader crypto market has lost $ 2 trillion in value. This is a historical loss of wealth.
In Canada, the first Bitcoin-focused Exchange Traded Fund (ETF) was launched in February 2021. Purpose Bitcoin ETF (TSX: BTCC.B) plunged 54% in 2022 at the time of trading in the mid-afternoon of July 15. Its stock is down 32% year-on-year.
Cryptocurrencies have shown a negative reaction to the tightening of the interest rate environment. This also curtailed alternative assets such as gold and silver, though not as much as Bitcoin and his associates were hit. The threat of a future recession is the pesky development of cryptographic space. Can digital currency miners establish their position in this environment?
Is there any reason to rob crypto miners and other related stocks?
Hat 8 mining (TSX: HUT)(NASDAQ: HUT) A cryptocurrency mining company based in Toronto. The share of this cryptocurrency plummeted by 80% in 2022. This pushed the stock into a negative territory year-on-year. The stock reached a record high of $ 20.61 in late 2021. It currently sells for $ 2.00 per share.
Investors can expect the next result of the hat in the first half of August. Revenue of $ 53.3 million was achieved, up 67%. Meanwhile, adjusted EBITDA was $ 27.1 million, up from $ 16.1 million in the previous year.
HIVE blockchain (TSXV: HIVE)(NASDAQ: HVBT) Is a Vancouver-based cryptominer based in Canada, Sweden and Iceland. The stock has plummeted 74% so far in 2022. The stock is down 68% from the same period in 2021.
Similar to Hut 8 Mining, HIVE Blockchain has achieved strong results against the backdrop of soaring digital currency prices in 2021. But its earnings will definitely be under pressure in this bear market.
These cryptocurrency miners are worth watching in this environment, but at the time of this writing, the wider market is very volatile. I don’t want to buy a dip at this stage either.
Why stay away from this sector for the rest of the year
The field of cryptocurrencies has not responded well to central bank policy shifts. Policy makers have made it clear that they will continue to raise rates to combat inflation. This means that the adaptable environment in which cryptography has seen prosperity is unlikely to return in the near future. I am avoiding crypto space in the summer of 2022.