December 9, 2022
most of the downturn in crypto is attributable to macro factors 2023

It is predicted that crypto assets will become more correlated with financial systems in the near future. According to Coinbase Institute research, most of the downturn in crypto is attributable to macro factors and blog posts about crypto prices. 

In November last year, cryptocurrency’s market capitalization reached $2.9 trillion, but it’s since declined by more than two-thirds to less than $1 trillion. There have been nine quarterly declines of 20% or more in the total crypto market capitalization since 2010.

A high of more than $69,000 in November made Bitcoin the world’s biggest digital coin. Bitcoin is now down 70% from its all-time high.

As a result, many experts have warned of the emergence of a prolonged bear market known as “crypto winter.” The last time this happened was between 2017 and 2018.

During the period between June 2017 and June 22, the crypto market capitalization increased 860% due to institutional and retail adoption of crypto, as well as the development of Web3, which includes decentralized finance applications, non-fungible tokens, decentralized identity solutions, tokenization of real assets, and decentralized autonomous organizations.

Read Also: Steep Crypto Tax Causes Brain Drain From India To Dubai And Singapore 2023

More about; Most of the downturn in crypto is attributable to macro factors 2023

  • Why bitcoin is down?
  • From 2018 to 2022
  • COVID shock of March 2020
  • Future of cryptocurrency
  • Latest news about bitcoin

most of the downturn in crypto is attributable to macro factors

Why bitcoin is down?

Most of the downturn in crypto is attributable to macro factors. According to experts, A wide range of climate factors are responsible for this. Things aren’t looking good in only the crypto world. Living costs are climbing, inflation is soaring, and interest rates are rising. A recession looms. A bear market has erupted in US stock markets as well (down 20% from recent highs).

As more people sell bitcoins, their value decreases, because the demand for it determines their value. People are more likely to sell because they see the value declining… causing the cycle to continue.

From 2018 to 2022:

It was a steep rise in 2017 that led to a sudden slump in 2018 for bitcoin and other tokens.

Many new crypto projects popped up all over the market, but most of them failed because people poured money into initial coin offerings.

Researchers found that most of the downturn in crypto is attributable to macro factors and the crypto market cap decrease in 2022 was over 57%, while the S&P 500 dropped by 19%. If macroeconomic conditions alone were to blame for the decline in crypto assets, the decline would have been about 38%.

COVID shock of March 2020:

COVID-19, whose magnitude was palpable as it set in, exposed our global economy’s lack of ability to handle the shock, causing all markets to panic. Crypto markets (in absolute terms) were hit harder than the S&P and NASDAQ (each declined about 30%). A brief loss of over 60% in the value of BTC was observed when the dust settled.

A panicked investor rushed for cash as a result of COVID, sending all liquid markets sharply down. 

Future of cryptocurrency:

By 2030, experts project that the global cryptocurrency market will be worth nearly $5 billion, more than doubling from its current value. It’s impossible to ignore crypto’s rising tide long for investors, brands, and businesses, no matter what they think. Paradoxes seem to follow crypto everywhere.

In the view of Fracassi, stocks, bonds, commodities, and cryptos carry a price that is a reflection of what the market expects they will be worth in the future.

Due to the rise of centralized lending schemes and so-called “decentralized finance,” blockchain-based financial products created on the blockchain-enabled crypto investors to accumulate vast amounts of leverage.

In 2018, retail investors’ positions opened on cryptocurrency exchanges and were automatically liquidated when margin calls failed, leading to an escalation in selling.

Latest news about bitcoin:

Bitcoin fell below the $20,000 mark for the first time since December 2020 in Saturday’s trade, dropping as low as $17,592.79.

Over the last 24 hours, the total value of cryptocurrencies has risen to $961 billion, up about 3 percent from a day earlier. Although cryptocurrency trading volume fell by about 26 percent to $127.41 billion, it surged by about 26 percent.

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