Analyzing the Current Challenges Faced by the Crypto Market

The cryptocurrency market has experienced significant growth in the past few years due to a jump in crypto adoption.

Major financial firms across the globe are diversifying their investment portfolios with cryptocurrencies.

Bitcoin (BTC), the world’s largest cryptocurrency by market capitalization, has grown in value manifold.

But 2022 has not been an ideal year so far for cryptocurrency since the crypto market is bearish for months.

This has happened because of the multiple challenges faced by digital currencies including lack of regulation, price volatility, and more.

Let us find out the most important challenges faced by the crypto market and how you can overcome those.

Understanding Cryptocurrency

A crypto investor needs to build knowledge about digital currencies before investing in them.

Cryptocurrency is a new currency as compared to fiat and you can suffer losses if you do not understand it comprehensively.

Cryptocurrencies can be defined as digital or virtual currencies that exist on blockchain technology.

To ensure enhanced safety, blockchain is protected by cryptography which consists of complex mathematical problems.

The crypto market has grown in size and value since the introduction of cryptocurrency in 2009.

Instead of BTC, over 10,000 cryptocurrencies are available from which you can choose the digital currencies of your choice.

You can buy cryptocurrency through a crypto exchange and neither a bank nor any government can interfere with your wealth, thanks to the decentralized nature of cryptocurrency.

Carl Runefelt, alias, The Moon, is a global crypto leader who is pushing for the mass adoption of cryptocurrency.

He says, “Your bank money can get frozen, or your gold can get confiscated but with Bitcoin, you can literally cross a border with your private keys in your head, and you can travel the world with millions of dollars literally stuck in your brain. This is something that has never been possible before, and we can see that people in times of uncertainty are using Bitcoin more and more in the next few years.”

Challenges Faced by the Crypto Market

The crypto market in the current year has been bearish since many digital currencies have lost value. Bitcoin has fallen from staggering $60,000 (November 2021) to $18,000 (as of September 2022).

There are multiple factors responsible for the current crypto downfall such as the ban on cryptocurrencies in countries like China.

So, what would you do in all such circumstances?

Listed below are some of the most important challenges faced by the crypto market and how you can make handsome profits with cryptocurrency.

Lack of Education

Lack of crypto understanding might be the gravest of challenges faced by crypto users around the world.

Education plays a crucial role in the financial markets and more so in the crypto market as many consider cryptocurrencies as complex assets.

People start investing in cryptocurrency without understanding how it works.

This is the first step toward failure in the crypto business.

When you want to invest in cryptocurrency, the first thing you should do is build knowledge about cryptocurrency to stay away from losses.

Analyzing blockchain will help you make the right type of cryptocurrency investment.


Cryptocurrency is volatile which means that its value can fluctuate within minutes. This is because of the decentralized nature of digital currencies.

Volatility is yet another challenge faced by the crypto market since many digital currencies have lost value.

A key factor that plays a vital role in crypto volatility is market sentiments.

Mostly, people follow the market sentiments when investing in cryptocurrency.

Sometimes crypto investors create hype around a coin to attract investment and once it is over, the value of that particular coin can fall rapidly.

Carl on his YouTube channel, The Moon, says, “To make huge profits from investing in cryptocurrencies, one must carry rigorous market study and notice the factors which affect a particular cryptocurrency.”

You can benefit from crypto volatility by reading the current trade charts of a cryptocurrency. This will help you make the right decisions and choose the right type of cryptocurrency to invest in.

Speculative Trading

Another challenge faced by the crypto market in 2022 is speculative trading.

Most crypto traders look for short-term benefits when investing in cryptocurrency and miss the big picture and long-term impacts of cryptocurrencies.

Instead of looking for speculative benefits, you should look into the longer horizon.

Even if the value of Bitcoin is falling, instead of selling it, you should hold on to your BTC.

Such fluctuations have happened in the past too and Bitcoin has always bounced back strongly.


The crypto market is just a few years old and there is still a lot of time for its improvement.

There are many cryptocurrencies available that you can buy, but your investment is largely dependent on the trading strategy you follow.

So, when you are investing in cryptocurrency, it is in your hands to make it a success or a loss.