The crypto trading market has not fared particularly well this year. Bitcoin, the largest, most popular currency and the metric by which the entire market is measured, had fallen some 40% in value compared to its near $70,000 record high last year. Ether and other Altcoins have also seen massive tumbles in value, some by as much as 50%. In the last few months, the cryptocurrency industry has lost a total of $1.2 trillion in value.
Much of the blame for the vulnerable and unstable nature of the crypto market is a direct result of its increasing alignment with the trends of the general equities and stock markets, and this is especially true of Bitcoin.
Bitcoin is Becoming Increasingly Affected By Worldwide Trends
In its early days, one of the main attractions of Bitcoin was its independence from general market trends. Bitcoin going mainstream has brought many benefits, but that has also caused it to become more easily affected by global economic and financial movements. This year, the conflict in Ukraine, the world still slowly coming to terms with a post-pandemic era, as well as supply issues in the tech industry have all taken a toll.
The Federal Government has also made things difficult in its attempts to combat rising inflation. Actions such as raising interest rates and cutting down on the huge stimulus packages have experts worried that the central bank will start decreasing its massive $9 trillion asset portfolio as it tackles growing inflation.
Leave a Reply