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7 Cryptos to Watch as the Blockchain Holds Steady

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Some of the top notable cryptocurrencies suffered devastating losses this year, raising questions about their viability. Of course, many, if not most, of the blockchain market aficionados believe that valuations can rise again. However, it is important for cryptocurrency traders to keep an objective point of view.

Fundamentally, the biggest challenge facing cryptocurrencies is the Federal Reserve. When the coronavirus pandemic first upended the global economy, the Fed expanded its balance sheet.In other words, it bought back the bond and it was introduced Massive liquidity into the monetary systemIronically, it is beneficial for cryptocurrencies because of inflationary pressures. Now central banks are trying to shrink their balance sheets. Such measures reduce the liquidity of the system, purchasing power The dollar along with benchmark rate hikes will therefore bore Treasuries and present relatively low-risk ventures with sizable returns, even while sitting in cash. This dynamic contrasts with ciphers, which are constantly eroding.

Unfortunately, until this narrative is reversed, it’s hard to see how cryptocurrencies can quickly recover from their woes. Therefore, it is important to consider all aspects while navigating the digital asset market.

Bitcoin (BTC-USD)

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benchmarks for all cryptos, Bitcoin (BTC-US Dollar) is getting a lot of attention because wherever BTC goes, so does the rest of the cryptocurrency complex. The current situation is therefore not very encouraging for investors. Year-to-date, Bitcoin has fallen more than 59%. And since the beginning of July, BTC has been evenly positioned.

Basically, it’s hard to imagine Bitcoin staying static and in range indefinitely. Virtual currencies usually have a directional bias. Investors may therefore need to consider how to approach BTC and other major assets.Interestingly, some technical his analysts are eyeing Bitcoin price movements. death, maybe a few months Before we saw a big expansive motion in space. However, investors would do well to exercise restraint when it comes to technical his patterns and other “voodoo” chart his magic regardless of the implications.

It’s not that I don’t believe in the value of technical analysis. However, with the Fed imposing a major paradigm shift on the risk-on asset class, it is best to take a cautious approach.

Ethereum (ETH-USD)

A concept image of a virtual coin based on the Ethereum logo.

Source: Filippo Ronca Cavalcanti / Shutterstock.com

ethereum (ETH-US Dollar) recently underwent a consensus protocol change moving from Proof of Work (PoW) to Proof of Stake (PoS). Interestingly, Cointelegraph.com We noted that many traders expected the price of ETH to rise as the underlying network entered a deflationary state. In other words, fewer ETH units exist to chase more commodities.

However, Ethereum remains a disappointing investment in 2022. Ethereum is down 64% of him since the beginning of the year.ever since merge event, the coin fell about 8% of its market price. Here, Cointelegraph.com offers an important lesson.

“The mechanism introduced by the merger and the current state of deflation are technically supposed to push prices higher, but the timing is simply not right. Not just based on delivery and combustion mechanisms — Liquidation also plays an important role. ”

Going forward, investors will expect pure risk-on assets such as cryptocurrencies to Greater Fool TheoryIf you don’t expect someone else to buy your coin or token at a higher price, that story should guide you, not the jargon of blockchain magic.

Tether (USDT-USD)

Concept token of the Tether cryptocurrency.

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Increasingly, I am expressing concern about stablecoins such as tether (USDT-USD) because of the potentially catastrophic risk. I don’t think the tether will completely collapse, but we really don’t know Whether USDT enjoys a full paper backing. Therefore, under the current cryptocurrency deflationary ecosystem, it is better to be safe than sorry.

In other words, consider converting at least some of your Tether back to US dollars. In fact, the Federal Reserve is just motivating you to make this move.

USDT has lost about 0.03% in value since the beginning of the year, according to data from Google Finance. It’s not a big deal. But here’s the point.Aggressive action as the Federal Reserve reduces the size of its balance sheet Can trigger a liquidity crunchPut another way, the fiat dollar may be worth more than the crypto dollar. Indeed, you can always earn interest on stablecoins via decentralized finance (DeFi) platforms. However, the tether runs the risk of complete collapse. On the other hand, the dollar is probably going nowhere, no matter what your favorite pessimistic YouTuber says.

XRP (XRP-USD)

A concept token of XRP with a stack of tokens in the background.  XRP price prediction.

Source: Shutterstock

Cryptocurrencies have always had unpredictable risk and reward projections, XRP (XRP-USD) may be completely decoupled from all correlations. Whether looking at Federal Reserve policy, gold prices, or stock market valuations, none of these metrics will ultimately determine XRP. Instead, the U.S. Securities and Exchange Commission may have the final say.

If you have been following cryptocurrencies for the past few years, US Securities and Exchange Commission charged ripple lab (Founder of XRP) bypasses securities laws with XRP distribution. Of course, Ripple denies any wrongdoing and claims that XRP truly represents a cryptocurrency. Depending on the outcome of this trial, XRP could skyrocket or crater.

According to blockchain news resource Beincrypto.com, The legal battle will soon endFrankly, I have some concerns. The development could bode badly for crypto if Ripple loses. But even if Ripple emerges victorious, the possibility exists that the news won’t move his XRP, much like the Ethereum merge. Keep this in mind before betting big on XRP.

Dogecoin (DOGE-USD)

dogecoin cryptocurrency

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Although it is terribly unstable and risky even by the standards of virtual currency, dogecoin (DOGE USD) represents an interesting angle between cryptocurrencies. Generally speaking, DOGE’s focus is on community building and making money through speculation. It may sound silly, but I think there’s nothing wrong with this mentality. If anything, it forewarns people about the larger fool theory.

Unlike many other blockchain projects, Dogecoin members are not obsessed with grand ambitions such as tackling world hunger. Nor does the virtue of the broader DOGE community suggest promoting microtransactions and social equity in far-flung lands. No, DOGE is all about having fun and maybe making some scratch while you’re at it. Nothing more, nothing less.

Such decentralization from the core motivations underpinning other cryptos could separate Dogecoin from leaders such as Bitcoin and Ethereum. This would be beneficial given that Fed monetary policy has reduced incentives for both assets. Still, this is a very risky hypothesis, so be careful.

AAVE (AAVE-USD)

Aave Cryptocurrency Logo..Aave Price Prediction

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Most cryptocurrencies posted disappointing results on the charts last week, Urb (AAVE-USD) reversed, with stakeholders returning 5.4%. Certainly not the most robust performance ever. However, in the past three months, AAVE has risen nearly 3% of his. This small but significant upside movement suggests that AAVE may continue trending against the sector’s prevailing bearish trend.

Basically, Aave brings an interesting framework to the table. According to crypto wallet service Kraken, Aave is his DeFi platform. In particular,”Decentralized lending system It allows users to lend, borrow and earn interest on crypto assets without an intermediary. Most importantly, “Aave users do not have to trust any particular institution or individual to manage their funds. All they need to do is trust that their code will do as written.” ”

Indeed, the higher returns resulting from DeFi platforms tempt onlookers. However, investors should also be aware that holding Treasuries, or even cash, presents an opportunity to grow wealth with less risk. Therefore, AAVE and all other ciphers should be used with this framework in mind.

Polygon (MATIC-USD)

A smartphone above a laptop keyboard displaying the Polygon logo.Porygon price prediction

Source: sdx15 / Shutterstock.com

Another name for the cipher that produced positive results in the last week is polygon (MATIC-USD) rose just under 2%. Under other circumstances, such returns receive less attention. However, so far this year, most digital assets have suffered heavy double-digit losses, so any signs of a sustained uptick warrant further investigation.

According to Coinmarketcap.com, Polygon is a well-structured and easy-to-use platform. Ethereum scaling and infrastructure developmentIts core component is the Polygon SDK, a modular and flexible framework that supports building multiple types of applications. ”

Polygon recently grabbed some headlines in the cryptocurrency industry. New Holdings (New York Stock Exchange:new) (Warren Buffett’s financial institution Berkshire Hathaway (New York Stock Exchange:BRK-B) backs) have confirmed that they have adopted Polygon’s “supernet” technology. blockchain and digital tokensknown as Nucoin.

Warren Buffett’s allusions are interesting, but investors should exercise caution. The Ethereum merge was also supposed to be groundbreaking, but ultimately didn’t do much for Ethereum.

Josh Enomoto on publication date He held long positions in BTC, ETH, USDT, XRP, and DOGE. The opinions expressed in this article are those of the subject author of InvestorPlace.com. Publication guidelines.

Former Senior Business Analyst at Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has provided unique and critical insights into the investment market as well as various industries such as law, construction management and healthcare.

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