Crypto Ice Age
For the value of Bitcoin and other cryptocurrencies, bear crypto markets have nearly become commonplace. The bitcoin price has decreased six times by more than 50% since its 2009 debut. It’s a crypto ice age, said Dan Dolev, a Mizuho analyst. He believes this could be a very serious and extended situation, and many cryptocurrencies won’t even make it out of the downfall.
Bitcoin and nearly 19,000 other virtual currencies are facing their first Federal Reserve tightening cycle as a result of an inflationary breakout. These outbreak and tightening are the actual cause of the collapse of the crypto industry.
FED to be blamed for the downfall?
The most favorable financial conditions have existed for the majority of the history of crypto trading. Since Bitcoin’s debut, the Fed has mostly worked to support consumption. The Fed acquired Treasury bonds and government mortgage-backed securities worth $6.5 trillion throughout that time. In an effort to promote contingency, raise asset prices, and expand the market through wealth gains, it maintained low rates. Most asset values are now falling due to the Fed’s abrupt end to its enormous stimulus program. Growth stocks have been particularly hard impacted by the spike in the multiyear Treasury rate.
In June 2011, the very first Bitcoin meltdown started right as the Fed’s second round of asset purchases after the economic crisis came to an end. The second crypto crisis happened as soon as the tapering crisis in spring 2013 over the potential wind-down of another round of investment. The third Bitcoin fall followed the same pattern when the actual tapering process began at the end of 2013. The Federal Reserve rate hikes occurred as it started to gradually reduce capital spending and the late 2017 meltdown happened. However, none of those occurrences experienced the tightness of today.
Pre-planned crypto market crash
Although the S&P 500 and Nasdaq had indeed entered a bear crypto market, authorities nevertheless opted to speed up their tightening measures last week. The Fed does not focus on any one asset category. However, the $2 trillion destructions of the crypto markets are entirely planned.