The year 2020-2021 saw a large influx of new investors into the crypto market making its trading volume soar. Tesla CEO Elon Musk singlehandedly brought in the majority of investors into the crypto fold after he announced his investments in Dogecoin in early 2021. The market was plush with new and first-time investors and all top coins saw phenomenal growth up until May 21′. The market then saw a slump during the second half of the year but picked up steam in November. Both Bitcoin and Ethereum reached their all-time highs during that period and the sky seemed to be the limit.
Read More: YouTuber NasDaily Suffers Losses After Investing $500,000 in Bitcoin
The market took a complete u-turn from its bull run in 2021 and is slumping to new lows in 2022. Investors who entered the market between 2020-2021 have suffered the most losses and the market is testing its mettle. The bear market is running in a never-ending cycle making ‘buy the dip’ seem to be too risky.
Analysts worry that the batch of new investors might turn away from the crypto market due to facing heavy losses. “If the market decline continues, it will become too painful and retail investors will bail,” said Eben Burr, the president of Toews Asset Management to Reuters.
“Everyone has a breaking point,” he added citing that the younger investors might not return with new money anymore.
Read More: Exclusive: Bitcoin will Crash to $11,000, Predicts Crypto Tycoon
Can the Crypto Market Survive With No New Investors?
Now that the bear market is dominating the crypto sphere, questions arise ‘can the market afford to lose new entrants?’. Callie Cox, U.S investment analyst at eToro revealed to CoinTelegraph that the market has its way of funneling out investors.
“Crypto’s issue isn’t necessarily price, it’s education,” said Cox. The analyst continued, “Although some investors will be lost for good, each market cycle sees newcomers becoming believers in the technology.”
Read More: How to Buy LUNA 2.0: Here’s Your Guide
Therefore, the market will see investors come and go but the ones who can stomach its wild swings will remain. Also, once when the bull run starts, the market will naturally attract new investors through its news and headlines. The crypto market despite being more than a decade old is still a novice and has a long way to go.