When it comes to the markets and modern economics and finance, everything is connected. For example, the overleveraging practices of a few banks in the United States of America caused major recessions in all parts of the globe. In fact, we shouldn’t even say recessions; we should say a recession as it was just one huge global recession in the year 2008! Another example of it could be the tumbling of stocks in China was followed by the tumbling of stocks in America when coronavirus was first spreading exclusively in the People’s Republic of China.
How all this interconnectedness of the markets impacts the crypto market in specific is something we will come to later on. However, we would like to stress something very important about this interconnectedness. To make sure you know when to pull all your money out from the market and when to put money in it, you need to be able to have constant access to the news. For example, when it was said that India was going to ban cryptocurrency, crypto prices dropped in America as well. The people who came to know of the news right when it came were able to sell their crypto assets right in time before their prices dropped. This is why it is important to have access to information related to markets all the time. The best way to access information is to get reliable internet with you all the time. And that all the time factor requires you to go for mobile internet as that is the kind of internet that remains with you even when you are not stationed at a specific place such as your home or your office. In the case that you already do not have reliable mobile, we would suggest checking out the Xfinity Mobile plans. Comcast Xfinity, over the years, has been known to provide quality services for internet, television, and mobile.
Now that we have enlightened you on how to get the best mobile internet in order to stay up to date with all the news of the world and in turn make money or stop yourself from losing it, we can start exploring how all the interconnectedness of the world has impacted the crypto market. But before we dive into that, let us define the term cryptocurrency.
What is Cryptocurrency?
Cryptocurrency is also called by the names of crypto or coin. The phenomenon is basically a conglomerate of digital currencies. By digital currency, we mean a type of currency that can be generated, stored, and transmitted digitally. It is different from a general currency because a general currency is normally regulated by an entity as large as a sovereign government of a state and as small as a central bank of a state. The thing about cryptocurrency is that its control is decentralized. This means that for the general functioning of the currency, instead of a central bank, the tech of a distributed ledger is used. This tech is normally in the form of a blockchain. All of this provides a public financial transaction database that is absolutely for any currency to survive in the real world. After all, if the data is not even public, someone can mess with it, steal billions of dollars of assets, and no one would even know!
Factors That Led To The Down Fall Of The Crypto Market
Now that we have defined what cryptocurrencies are, we can move ahead to what we had promised to touch upon in the title of this article – factors that led to the downfall of the crypto market.
Hike In Interest Rates
So you must have been wondering why we started this article with all this rant about the interconnectedness of economic systems and markets. We highlighted this aspect of the world because a decision made by a state institution of one country – The Federal Reserve Bank of the United States of America – actually ended up in a decrease in the prices of cryptocurrencies all over the world. The increased interest rates meant there was just less money floating around that could have been invested in cryptocurrency.
Post-Pandemic Resurge of Economy
Crypto experienced a boom during the pandemic because there were simply fewer flourishing businesses to invest in. Now that the economy is up again, people have places to invest in other than crypto so they are selling the crypto they had bought during the pandemic. This brings the price of crypto down.
By now, you must have gained an understanding of why the crypto market is down.