Why Crypto Prices Are Crashing and What Will Stop the Bleeding
The crypto market's downward spiral has made investors despondent. But hope is not lost if certain key factors play out.
The crypto market has proved that it's strongly connected to the stock market. If equities fall, so do Bitcoin and the best altcoins. The Dow Jones Industrial Average Index was down just over 5% last week and has started the new week in the red.
Several macroeconomic factors have caused asset prices to fall. A looming recession, rising interest rates, high inflation and geopolitical instability have made investors jittery and prompted them to pull out of the market.
August's inflation rate in the US was 8.3%. The last time inflation numbers were that high was forty years ago. The increase in prices such as gas, food and other basic necessities have left investors with less money in their pockets.
To supplement the shortage, some investors have sold assets.
A recession is the latest talk of the town. The US had officially entered a recession in the summer of 2022, and some analysts have an even gloomier outlook. According to certain economists, a global recession that's poised to be worse than the Great Depression is on its way.
With such fears looming, many investors anticipate a massive market crash. To avoid losses, investors have decided to exit before lower prices.
The tension between Russia and Ukraine has made many citizens concerned about potential conflict spreading to their region. Food shortages have become more common and gas prices seem to be heading higher.
Many investors are panic-stricken by the global turmoil and decided to stock up on the essentials. Having an abundance of bread and milk has become a priority over the latest hot stock.
To fight inflation, the US Federal Reserve has increased
Read more on cryptonews.com
