Cryptocurrencies are volatile, we get that, but how do you navigate this crazy crypto market, especially if you’re a new investor? After a mini-recovery only a day ago the crypto market is down.
Again.
Here are some reasons why
- Price moves can be impacted by macroeconomic conditions and we’re seeing that today as crypto prices across the board fell off a cliff in yet another flash crash.
- Rising interest rates and other government measures may lower investor confidence in risky alternative assets.
- Some people may instead opt for safer investments, such as savings accounts, which offer predictable returns.
- Meanwhile, falling prices may force investors to free up their cash. These factors can compound the pressure on the market and cause prices to crash.
Bitcoin
One reason for the current crash is a growing fear of inflation, and the rise in interest rates has dampened investors’ appetite for risky assets. This fear has driven investors to dump crypto and move their money to safer and more predictable assets, such as bonds.
However, this fear is not exclusive to Bitcoin; other cryptocurrencies have experienced price drops as well.
This week Bitcoin has sunk below $20,000. The market cap of cryptocurrencies has declined about 10% since the start of the year and is predicted to fall further as Bitcoin struggles to stay above the $20K mark. On top of that, the news that the Federal Reserve intends to hike interest rates is likely to be a…
