The crypto market is witnessing one of the biggest crash in the history of crypto trading. Crypto investors are at crossroads. The crypto crash has continued for a week. Crypto traders are skeptical, confused and unwilling to trade. Many are asking the question; Why is Crypto Crashing ?
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Over the week the crypto market lost over half of it’s value. The crypto blockchain monitoring firm CoinMarketCap pegged the loss at over a trillion dollar. This is arguably one of the biggest crypto crash. In a year interval, bitcoin fall from it’s $67k all time high to a $32k, taking all other altcoins with it. The crypto fall seems not to be abetting.
Aggregate prediction reports indicates that the crypto fall is not over. The prediction reports are projecting a crash down to $20k price for bitcoin before the the ressetting fall will stablise and market experiences a bounce-back.
Crypto traders wants to know what is causing the crypto crash. They also wants to know when the crypto crash will stop. Some of these factors may provide answers to ; why is crypto crashing ?
Global Inflation/ US Govt Reserve Increase of Interest Rate.
There is a surging global Inflation. Prices are rising all over the world. Leaders and technocrats are baffled on how to stem the tide. Washington Post investigaton shows that America the global market leader in crypto trading is witnessing highest inflation rate in 40 years. European Union and the UK is not left out. They are hit with skyrocket inflation last seen in 30 years. The inflation rise started from 2021 post pandemic, after ease of lockdown. Production is down and people are more interested in satisfying their utmost needs than investing.
Crypto is crashing because production dropped and demand for basic commodities like food and medicine have increased. In sub-Saharan Africa, rising fuel costs meant more expensive fertilizer, which translated into higher food prices, according to the International Monetary Fund. With food making up 40 percent of consumption spending, inflation in the region last year leaped to 9 percent from 6 percent.
The U.S economic woes has spiraled to all part of the world and crypto market crash is part of the outcome. “Part of what we’re seeing in the U.S. is very similar to, and echoed in, the rest of the world,” said Nathan Sheets, global chief economist for Citigroup. “And part of it is unique to our circumstances and particularly to the strength of U.S. aggregate demand.”
Global Financial Market Crisis.
Crypto Crash is not the only trending news, the stock market crash is also trending. The global stock market started on a tough side in 2022 and has shed over 20% according a CNN report. Many believe that the crash of the stock market is has snowballed into the crypto market crash, as speculation and fears besiege investors. Crypto and stock traders are selling off in billion droves in a catastrophic market crash. Many crypto traders are apprehensive that the crash in stock market will affect the crypto market and has embark on mass sell off.
Government Clamp Down On Crypto.
The first day of crypto crash began after Russian government announced restrictions plans that crypto traders fear will cause a bear run leading to sell offs.
Reuters reported that Russia’s central bank has proposed a ban on crypto use and mining. Russia is one of the biggest crypto-mining nations in the world, but the country’s central bank believes that digital currencies can pose a threat to the country’s financial stability.The Russian proposal follows just a few months after China launched a full-scale clampdown on cryptocurrency, banning both trading and mining.
As crypto traders confidence continue to roll in the dip mud, El Salvador president Nayib Bukele continues to preach the financial crypto gospel of hope. He announced that the only nation to make bitcoin a legal tender has purchased 410 bitcoin in an attempt the forestall bitcoin crash and restore crypto traders confidence.
Goldman Sachs, the leading global investment bank is optimistic that the price of bitcoin could reach more than $100,000 within the next five years. In a report published earlier this month, the bank’s analysts said they saw strong gains ahead because bitcoin would increasingly steal market share from gold. There seems to be hope at the end of the tunnel. They crypto crash will come to an end, a little patience may be the answer.