Why the Crypto Market is Down
Many analysts wonder why the crypto market is down today. While there are many reasons for this slump, the latest one has the most logical explanation: President Biden just signed a $1.2 trillion infrastructure bill that has major implications for crypto investors. The legislation may also impact tax ramifications, which could have a negative impact on the price of cryptocurrencies. While the current price of Bitcoin is down from around $40,000, this represents a big rise from the low-four-figure range in September. Last month, Ethereum also hit an all-time high.
The market is experiencing a reversion in price, which usually occurs after major upswings. Since February of 2016, the value of digital currencies has increased by 14 times. The biggest increase was seen in March 2017 when the market reached a record high. However, this rise was short-lived as the price of cryptocurrencies plummeted by more than 90% over the next 11 months. While the reversion in the market is a temporary phenomenon, the underlying trends remain consistent.
The reason why the crypto market is down today is the rising expectations of inflation. While most speculative investors have been buying on margin and using leverage to maximize gains, the Fed’s announcement signaled that they plan to raise interest rates again in the near future in an attempt to combat inflation. According to Steve Ehrlich, the CEO of Voyager, the main cryptocurrency trading company, the crypto crash may be related to the technology sector.
Why the Crypto Market is Down Today and Will Continue to Fall in 2021
As inflation worries continue to plague the tech sector, investors are dumping their crypto assets into high-interest assets. While this may seem like a good idea, experts advise against putting all of your money into crypto. They recommend saving emergency funds or paying off debt at high interest rates. Then, they’ll take advantage of the high price of these cryptocurrencies. If you’re looking for an investment opportunity, consider investing in a safe asset such as Bitcoin or Ethereum.
Although the crypto market is still volatile, the interest is growing and the amount of significant players is growing. As such, the industry will remain volatile and unpredictable for the foreseeable future. In addition to this, it will continue to be down until the end of 2021. But while the current crypto market is still down today, it will be up again in the future. The same goes for the value of stocks in the U.S., which has lost about 40% since the start of the year.
While the cryptocurrency market is still very volatile, the interest in digital currencies is growing. Despite the recent drop, many experts believe that the crypto market will remain volatile for years to come. But for the moment, investors are not interested in investing in this market, but they will continue to monitor the crypto markets. So, while this is a bleak outlook for the industry, there are some positive signs of hope.