Why is crypto crashing now?

Unprecedented inflation, fear, rising interest rates and a loss of confidence in cryptocurrency investments are contributing to the decline of cryptocurrencies. Analysts say that most factors are “macro”, meaning that they relate to the economy as a whole and not to the failures of the cryptocurrency market. So why are cryptocurrencies crashing? It is important to remember that in this last cycle, crypto assets are not alone. The stock market has also been experiencing a recession, as U.S.

policymakers seek to control inflation by tightening the money supply and raising interest rates. Shivam Thakral, CEO of cryptocurrency exchange BuyuCoin, said that rising food, gas and energy prices are putting enormous pressure on the cryptocurrency market, as Bitcoin and Ether have recorded double-digit losses in the past 24 hours. The crypto ecosystem has firmly adhered to the traditional financial system, and the dollar dominates cryptocurrency markets just as it does with traditional financial markets. Reconsider what you would be most comfortable with in the future, such as allocating less money to cryptocurrencies in the future or diversifying through cryptocurrency-related stocks and blockchain funds instead of buying cryptocurrency directly (although you should still expect volatility when the cryptocurrency markets) fluctuate).

Therefore, cryptocurrency prices are usually quoted in dollars, most crypto transactions involve stable currencies linked to dollars, and stable currencies linked to the dollar are widely used as secure collateral for cryptocurrency loans. The co-founder of the automated cryptocurrency trading platform Coinrule, Oleg Giberstein, believes that cryptocurrencies are suffering the same tensions as other parts of the economy, leading to falling prices. The immediate trigger for the cryptocurrency crash appears to be a massive sell-off by investors amid rising fears of inflation and the pause in withdrawal by crypto lending service Celsius.

Alexander Osario
Alexander Osario

Total twitter fanatic. Devoted tv trailblazer. Extreme pop culture ninja. Lifelong internet buff. Hardcore sushi expert. Hardcore music buff.

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