Crypto Crash in 2022! Here’s why Bitcoin and other Altcoins Collapsed

Bitcoin prices collapsed massively last night. The overall cryptocurrency market fell by more than 7% in the past 24 hours. Bitcoin prices reached a low of USD 43,000, while other altcoins breached their support levels. Did we officially enter a crypto bear market? Why is the crypto market crashing? Let’s dive into the specific reasons.

US Federal Reserve

After the US Federal Reserve (FED) published the minutes of the previous meetings yesterday evening, almost all US technology stocks crashed. The Nasdaq-100 tech index lost almost 2% at the end of trading. With the tech values, the crypto values ​​also crashed. In addition to Bitcoin, Ethereum, Cardano, and Solana also lost. Usually even in double digits. It seems like the market is currently evaluating cryptocurrency as a tech stock.

Why did Cryptos Crash?

Tech stocks usually react much more aggressively to news from central banks than value stocks. Especially interest rate changes and inflation usually weigh on tech stocks. The often indebted companies have to spend more money to pay off their debts when interest rates are higher. If inflation is higher, their future profits will be worthless, which will also depress the price. Even if this is not the case for Bitcoin, the price seems to correlate with Tech shares or at least with the FED protocol. In that very protocol, the central bankers fear a further rise in inflation (more than assumed) and at least three interest rate hikes for 2022. Possibly even a fourth. The end of loose monetary policy.

How will this Affect Bitcoin?

The effects on Bitcoin should be manageable. In fact, it is not yet known how Bitcoin behaves when inflation is high. It is possible that high inflation could even fuel the Bitcoin price and give it a reputation as digital gold. The fact that there will be less liquidity in the market due to higher interest rates should only affect Bitcoin to a limited extent. Especially since interest rates are likely to remain comparatively very low even after the increases.

Overall, most of the inflation and interest rate risks are likely to be factored in by now. Little should stand in the way of long-term recovery of the Bitcoin price. If you are looking to buy the dip, check out Binance.

Amazon Bitcoin
© Cryptoticker

The post Crypto Crash in 2022! Here’s why Bitcoin and other Altcoins Collapsed appeared first on CryptoTicker.


Share on facebook
Share on twitter
Share on pinterest
Share on linkedin

Follow Us

Most Popular

Get The Latest Updates

Subscribe To Our Weekly Newsletter

No spam, notifications only about new products, updates.
On Key

Related Posts

New Strategic Partner for CheersLand: Medabots

Cheerlands has made an announcement about its partnership with Medabots, which is one of the best GameFi projects across the world. So it is the new strategic partner, and both of them will be working together in terms of cross-marketing, staking, working with tournament organizations, and competitions to grow each other’s projects in various ways.

FTX Ventures to Support Development of Product Categories

The segment of technology services is going through a phase of comprehensive transformation. Many competitive players are entering into the segment, and as a result, all stakeholders, including customers and investors, are getting access to new-age services and technology products. The organization is now gearing to make the future of the ongoing web3 Revolution even

Sphynx Labs Is Looking Forward to Integrating with Chainlink

Sphynx Labs, called the decentralized exchange, is officially integrating three different decentralized services, Chainlink, the leading network of Oracle, in a decentralized manner. Sphynx is working towards the enhancement of functions in its platform by- Using Chainlink VRF to verify that its drawing games are provably fair. Working with Chainlink Keepers to provide additional stop-loss

SundaeSwap and the ISO to Go LIVE on Thursday

The long-awaited moment has arrived! The information about the launch of  SundaeSwap DEX is presented in an easy-to-understand format below. Important Dates and Points to Remember: SundaeSwap will go live as a completely operational beta decentralized exchange on 20 January Thursday. The 1st round of ISO prizes will be determined on 25 January Tuesday. To