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Risk Warning - Notice to UK Users  

Estimated reading time: 2 mins

Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.

What are the key risks?

1.You could lose all the money you invest

The performance of most cryptoassets can be highly volatile, with their value dropping as quickly as it can rise. You should be prepared to lose all the money you invest in crypto assets.

The crypto asset market is largely unregulated. There is a risk of losing money or any cryptoassets you purchase due to risks such as cyber-attacks, financial crime and firm failure.

2.You should not expect to be protected if something goes wrong

The Financial Services Compensation Scheme (FSCS) doesn’t protect this type of investment because it’s not a ‘specified investment’ under the UK regulatory regime – in other words, this type of investment isn’t recognised as the sort of investment that the FSCS can protect. Learn more by using the FSCS investment protection checker here.

The Financial Ombudsman Service (FOS) will not be able to consider complaints related to this firm. Learn more about FOS protection here.

3.You may not be able to sell your investment when you want to

There is no guarantee that investments in crypto assets can be easily sold at any given time. The ability to sell a crypto asset depends on various factors, including the supply and demand in the market at that time.

Operational failings such as technology outages, cyber-attacks and comingling of funds could cause unwanted delay and you may be unable to sell your crypto assets at the time you want.

4.Cryptoasset investments can be complex

Investments in crypto assets can be complex, making it difficult to understand the risks associated with the investment.

You should do your own research before investing. If something sounds too good to be true, itprobably is.

5.Don’t put all your eggs in one basket

Putting all your money into a single type of investment is risky. Spreading your money across different investments makes you less dependent on any one to do well.

A good rule of thumb is not to invest more than 10% of your money in high-risk investments. Learn more here.

If you are interested in learning more about how to protect yourself, visit the FCA’s website here.

For further information about cryptoassets, visit the FCA’s website here.

With market crashes across the board, will crypto recover?

In this article we set out to find out what plunged us into this mess and will the cryptocurrency market recover?

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There is no denying we are in the midst of a bear market, not only are cryptocurrency prices at significantly lower prices than the highs experienced last year but the stock market too. While a bull and bear market are a natural part of the economic cycles, we set out to find out what plunged us into this mess and will the cryptocurrency market recover? 

Dropping from its record high of $68,789.63 achieved in November of last year, the Bitcoin price is now trading around the $20,000 region. After climbing up to $22,000 on Friday, the biggest cryptocurrency has settled on $20,540 at the time of writing. The market took a beating following the demise of two cryptocurrencies alongside global struggles caused by the war and rising inflation. 

It’s not just Bitcoin taking a beating, Ethereum and other major cryptocurrencies have also seen substantial drops in price. Dropping from a high of $4812.09 in November 2021, Ethereum is now trading at $1,146.99, also down over 70%. While crypto enthusiasts have seen worse, the market slumps are always a cause for concern.

What Caused The Crypto Market Crash?

Unfortunately, a number of negative factors took place in a short space of time resulting in a crash across the digital assets market, and other markets around the world too. The most prominent to the crypto industry was the demise of TerraUSD and Celcius. 

TerraUSD was a stablecoin issued by the blockchain platform Terra. Terra used its LUNA coin to maintain the $1 peg of the algorithmic stablecoin. When the TerraUSD price became unstable, investors took their money out of LUNA and caused both cryptocurrencies to implode. While Terra made attempts to recover this, the majority of investors had lost large sums of money. 

Shortly after this (some believe it to be as a result of this), the crypto lending platform, Celsius halted withdrawals, transfers, and swaps in an attempt to stabilise liquidity. This caused an even greater wave of concern over the platform’s liquidity and ultimately cryptocurrency prices. As investors rushed to pull out and protect assets, the cryptocurrency went from trading at $4 in January this year, to $0.80 today, resulting in a second crypto crash in a short period of time.

On top of this market uncertainty, the war in Ukraine is sending the prices of everyday goods soaring, causing many investors to seek less risky assets for investment. The Federal Reserve's decision to increase inflation rates furthered this sentiment, as seen by the price drop across the tech stock market and stock markets around the world. 

Will The Crypto Markets Recover?

This isn’t the first time we’ve seen Bitcoin, or the cryptocurrency market as a whole, crash. Each time the leading cryptocurrency has climbed its way back to new highs, never overnight. While the sentiment is moody, this too will change and Bitcoin and other cryptocurrencies will see a price increase again. 

To reiterate this point, crypto adoption is at an all-time high, while institutional investors (even El Salvador) are buying the dip and using the decreased prices to increase their holdings. While the market situation is unlikely to change overnight, the prospects for future growth are definitely around. 

Last month, accounting firm PWC published its fourth annual global crypto hedge fund report, stating that while the overall crypto market was quite bearish, managers remained extremely bullish on BTC”. 42% of which predicted that Bitcoin will close the year at $75,000 - $100,000 and 35% believed the price to reach over $50,000. 

The author of Cryptocurrency Investing for Dummies, Kiana Danial, stated that “What I expect from Bitcoin is volatility short-term and growth long-term”.

What To Do In The Cryptocurrency Market Crash

While we can’t fast forward to the prices the PWC managers mentioned above, there are other things to do before then. If you are in a position to do so, buying the dip is often a popular strategy among investors. Investors opt to leverage these periods of extreme volatility, buying low and then selling when the prices increase.

Alternatively, you can take the market’s downtime to rework strategies and focus on how you can go about achieving new investment goals. 

The golden rule of investing is to never invest more than you’re willing to lose. If you’ve lived by this rule (and don’t rely on the funds you’ve used to invest in cryptocurrency), leave your crypto investments as they are and allow them to return to their original value when the markets start turning. If you take your funds out of crypto, you will experience significant losses.

Is It Too Late To Enter The Crypto Market?

Quite the contrary. Now is an excellent time to enter the market as cryptocurrencies are selling below their value. According to the Fear and Greed index, the market is currently in a state of extreme fear. In the past, this has proven to be a lucrative opportunity in which to invest in Bitcoin and other coins.

As prices plummet, now is an even better time to buy crypto than it was a week ago. With the original cryptocurrency (many cryptocurrencies) down almost 10% from last week, now is a great time to take advantage of the market's volatility.

As the crypto market follows traditional economic cycles, many experts and market analysts have concluded that while we might be in a bear market now, this too will change and the market will take a turn.

In conclusion: will crypto recover? The short answer is probably, as it's proved time and time again, the market has recovered. 

Disclaimer: This article is intended for communication purposes only, you should not consider any such information, opinions, or other material as financial advice. The information herein does not constitute an offer to sell or the solicitation to purchase/invest in any crypto assets on a cryptocurrency exchange and is not to be taken as a recommendation that any particular investment or trading approach is appropriate for any specific person, especially in light of the current macroeconomic factors. There is a possibility of risk in investing in crypto assets and investors are exposed to fluctuations in the crypto asset market. This communication should be read in conjunction with Tap’s Terms and Conditions.


This article is for general information purposes only and is not intended to constitute legal or other professional advice or a recommendation of any kind whatsoever and should not be relied upon or treated as a substitute for specific advice relevant to particular circumstances. We make no warranties, representations or undertakings about any of the content of this article (including, without limitation, as to the quality, accuracy, completeness or fitness for any particular purpose of such content), or any content of any other material referred to or accessed by hyperlinks through this article. We make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up-to-date.


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