How crypto crash affect the global economy?
This is something that we can see and agree upon, Where do you think this excess money going to go. The person who soever has invested the money in the crypto market is mentally prepared because all coins are the most volatile assets there. You can be an overnight millionaire there or even lose all your harder savings in a single night through a bad crypto crash.
Why you have invested in the crypto market in the first place? Was it that you saw someone making a lot of money through it, if so then you have to cash out all your coins right away because when this principle comes people can’t make a profit right at that time and they are losing their savings because of the crypto crash. Invest in the crypto market of your personal choice. The Crypto market may see a boom or might go down, it’s unpredictable.
6 reasons why crypto crashes:
- Crypto investors taking on too much leverage.
- Lack of liquidity in cryptocurrency markets.
- Cryptocurrency regulation.
- Crypto security breaches causing fear.
- Crypto influencers causing volatility.
- Cryptocurrency correlations with the stock market
Experts say that the panic over inflation and the fears of a potential recession are the reasons behind the ongoing crypto market crash.
“When the Fed Reserve proclaimed that the interest rates would arise by the half of a percentage point, bitcoin saw a short relief rally where the crypto achieved the sum of $40,000. This sentiment did not last for long as market participants began panicking over inflation and a potential recession, resulting in equities and crypto markets plunging,” Darshan Bathija, CEO and Co-Founder of Vauld, told FE Online.
The fear and the greed Index for crypto, which gauges market sentiment stood at “extreme fear” at the moment.
“The crypto markets have been moving in the lock-step within the equities market, and what we are observing right now is that the investors are treating the Bitcoin as a risk-on the asset. In the light of fears of rising the inflation in the market, most of the investors have taken a risk-off approach – selling the stocks and cryptos are like to cut down the risk,” said Bathija.
The cryptocurrency market’s near-$2 trillion loss in value forces a tough question: Could crypto trigger a broader economic downfall?
It’s a concern that highlights the uncertainty inherited in a market that by many measures is still in its early time but is now mainstream enough to inspire the multiple Super Bowl ads and attention from the mainstream financial institutions. Last month, Fidelity Investments, the nation’s largest retirement plan provider, said that it would allow the people to put bitcoin in their accounts, at the beginning of this year.
The question also points to the financial crisis that was started in 2007, when a drop in the housing market sent the U.S. into a deep recession period and in brief tensed the global financial system.
While there are plenty of reasons for the bad things around the crypto market and some of the more mainstream stock and the bond markets, experts who spoke with NBC News aren’t yet seeing signs of an epidemic from the crypto dive that could affect the larger economy.
Joshua Gans is an economist at the University of Toronto, said that he believed that most of the banks and the other financial institutions have the limited exposure to the crypto price fluctuations, having only recently begun to involve in it with the new crypto-focused offices and in the limited cases accepting the digital tokens as security for loans.
“They all have their differences, but putting a bet on the bank? I don’t think they have,” he said. Even if a bank has taken on too much crypto risk, he further added, “ we can handle one idiotic bank.”
At its peak in November, the entire crypto market was valued at $3.1 trillion, according to the data from CoinGecko, a company that collects the crypto data. On Monday, it was lowered to $1.3 trillion. The price of bitcoin has lowered by more than half from its top. The digital currency luna is now nearly worthless, and a related coin, TerraUSD, is on the shaky ground. And tether, a token that becomes increasingly important to how cryptocurrencies trade because of its price stability, needed an urgent rescue operation last week to avoid the online equivalency of a bank run.
Crypto trading is the most common among the men aged 18 to 29, of whom 43 percent said they had invested in, traded, or used a cryptocurrency, according to a Pew Research Center survey in September. Overall, 16 percent of the U.S. adults said they had.
The crypto market is still shortened by the sectors such as the U.S. housing market, which was worth $43.4 trillion the previous year, or 30 times crypto’s current market capitalization, according to the online real estate service Zillow. There was about $2.6 trillion worth of gold owned as the investments as of the beginning of the year, according to Goldman Sachs, with the total market capitalization of gold estimated at around $10 trillion.
But cryptocurrency may have many psychological effects that shorten the compared estimates to its value, especially as the prices of other assets including stocks fall and as rising U.S. interest rates have put the lock on the economy.
“It adds to the sense of bad thing going to happen and the bearishness phase,” said Eli Noam, an economist at the Columbia Business School who has written about the cryptocurrencies. “It’s another biggest part of the bearish news all around now, and so that people can take it in their differently owned business decisions — whether to hold on to the stocks or to consume or to invest or whatever they wish to.”
Noam said that while the loss is sizable, it comes in assets that had become dived.
Why crypto market crash today??
The global crypto market shrunk once again below 1.25 trillion in the past 24 hours after hitting the 1.28 trillion a day before. At the time of writing, the cryptocurrency market cap was $1.24 trillion, as per data on CoinMarketCap. Bitcoin price has also once again lowered below the $30,000 barrier, arriving at $29,195 at the time of writing.
The global cryptocurrency market volume over the last 24 hours lessened by 10.35% to $73.76 billion. The total volume in Defi was $7.03 billion, which is 9.54% of the total crypto market’s 24-hour volume. Stable coins volume was $65.08 billion, which is 88.22% of the total crypto market 24-hour volume.
Bitcoin price is decreased by 3.26 percent in the last 24 hours. Meanwhile, Bitcoin’s dominance as the top crypto asset has decreased by 0.18% to 44.64% over the day. Overall Bitcoin price has decreased by 1.09% in the last 7 days.
Meanwhile, many of the top cryptocurrency prices also crashed further in the last 24 hours. Have a look:
Ethereum (ETH): Ethereum price lowered by 2.85% as it once again fell below the $2000 mark to $1963 in the last 24 hours. In the previous 7 days, the ETH price has lowered by 4.07%. It is currently ranked as the second largest crypto asset in terms of market capitalization.
Binance (BNB): Binance coin’s price lowered by 1.69% to $302 in the last 24 hours. In the previous 7 days, BNB’s price has increased by 3%. It is currently ranking as the fifth biggest crypto asset in terms of market capitalization.
XRP: XRP coin’s price lowered by 4.41% to $0.4113 in the last 24 hours. In the last 7 days, the XRP price has lowered by 5.32%. It is currently ranking as the 6th biggest crypto asset in the terms of market capitalization.
Solana (SOL): Solana’s price is lowered by 3.41% to $49.84 in the past 24 hours. In the previous 7 days, the SOL price has decreased by 3.6%. It is currently ranking as the 9th biggest crypto asset in terms of market capitalization.
Cardano (ADA): Cardano token’s price is lowered by 1.95% to $0.5197. In the previous 24 hours. In the last 7 days, ADA price has lowered by 4.41%. It is currently ranking as the 8th biggest crypto asset in terms of market capitalization.
Popular meme coin Dogecoin’s (DOGE) price dropped by 2.75% in the last 24 hours. DOGE is presently ranking 10th in terms of market capitalization. The price of the DOGE at the time the report was published was $0.08419.
Meanwhile, prices of Polkadot (DOT) and Avalanche (AVAX) lowered by 2.3 and 1.92 percent in the past 24 hours respectively. DOT and AVAX are currently ranking 11th and 13th on CoinMarketCap. Polygon (Matic) price lowered by 2.22% to 0.6413 in the previous 24 hours. It is presently ranked 17th on CoinMarketCap.