Why are Crypto Crashing, the question everyone is wondering about and not just in the stock market or the Crypto market, everyone around the world is closely following the Crypto Crash and is keeping a close eye on its fall.
But why are Crypto Currencies Crashing? Why did Crypto drop in the first place? If you’re searching for the answer to all these types of questions, then don’t worry. By the end of this article, you will know everything about the Crypto Crash.
Why is Crypto Dropping?
As we all know Crypto Currency and volatility go hand in hand and since the beginning of this Crypto Crash people have been searching for the reason Crypto Currencies are dropping and there have been some conclusions to that question.
So why did Crypto crash?
First of all, Cryptocurrency is not owned by any organization, country or individual, that’s why nobody can control it and there are some pros and cons to that statement. It means Crypto can rise or drop-down within minutes and there is nobody to control the price when it falls!
The second reason though varies, after the second wave of the pandemic in May 2021 Bitcoin fell by over 53% when Elon Musk announced that Tesla will soon accept crypto currencies but he afterwards withdrew his statement because of the ‘environmental concerns’ crypto causes in mining and then a handful of investors started investing in eco friendly cryptos.
Then after sometime eco friendly cryptos like Solana and Cardano outperformed Bitcoin and other Cryptos to rise 27% above them and this was the time when NFTs were launched, due to which the crypto market saw a downfall as everyone started investing in Non Fungible Tokens.
But last month Crypto again dropped by 50% causing investors to lose a lot of money. The Luna-Tera Crash that got People to Lose their Faith in Crypto!
Crypto currency is also dropping due to the Luna-Tera Crash. Terra coin was marked to gain more Capitalism but it crashed leaving it’s investors in the dirt and eventually the investors lost $18 Billion due to the crash, it is also a reason why people are losing faith in Cryptocurrency and selling off their fair share of Crypto coins.
How Spectating Affected the Crypto Crash!
In 2019 Bitcoin was the only known Crypto Currency while today there are thousands of them and they’re worth more than $2 Trillion, because of which people are looking for get-rich techniques in the crypto market and they’re failing miserably at it. This is also a reason why crypto is dropping.
How the Equity Market Affected Cryptocurrency!
As we all know Cryptocurrency is decentralized but it also gets affected by the stock market, when people sell in the stock market eventually crypto traders also start selling and the value of Cryptocurrency eventually drops, this is also because people the Crypto prices fell similarly to the stock prices in the late 2021 and the mid of 2022.
As well in the S&P index when big stocks like Amazon, Apple, Tesla fell by 6% it was followed by Bitcoin, Dogecoin and Ethreum also dropping below $23,000 on Monday, which is also observed by the New York Times that the price of Bitcoin moves similar to that of Nasdaq.
Why is Crypto Still Dropping?
In an effort to bring down Inflation, the US Federal Reserve had to increase interest rates. The Wall Street Journal did a report indicating that the Federal Reserve will increase rates on everything like debt, bills, so that people would stop spending money which will eventually bring down Inflation.
However this Aggressive Strategy seems to have hit crypto currency as people started selling out Bitcoins, Dogecoins and Ethereum. The stock market and the crypto market both suffered a huge fall which eventually cost investors a fortune!
However the recovery may still be possible but as we know unlike stocks, crypto can go to 0, and in Crypto market that’s a huge possibility right now, but it’s a great time to be a bull as recession is beginning and according to many Crypto Investors and Experts it’ll rise up again and will be worth more than it is right now because we all know that the Future lies in the Crypto Market.