The crypto market crash that began in November has left investors’ heads in a spin.
By the end of January, the price of bitcoin had fallen 43% from the all-time high it made in November 2021.
The Future of Money index, Asia Financial’s basket of 10 leading cryptocurrencies, slumped 37.9% between November 22 and January 31, amid high volatility.
Watch the video for lessons investors can learn from the crypto market crash.
Why is crypto crashing?
The sell-off in digital assets was triggered by rising inflation and the Fed’s faster-than-expected shift towards interest rate hikes, as well as the threat of the Omicron variant and unrest in Kazakhstan, the world’s second-biggest bitcoin miner.
The price drops wiped 38% off the market cap of bitcoin and other cryptocurrencies.
The crypto crash halted briefly after US Federal Reserve Chair Jay Powell eased jitters over plans to raise interest rates. But bitcoin, the largest cryptocurrency, went on to touch $35030.25, its lowest in 20 weeks.
Will crypto crash again?
Experts remain divided on the future of cryptocurrency prices. Crypto bulls like Elon Musk see the current crypto market crash as a short-term development, and expect bitcoin to hit $100,00. Meanwhile, crypto bears are expecting a slump to $10,000.
Central banks in several countries, including Japan and India, are working towards launching their own digital currencies, while countries like China and Bangladesh have banned cryptocurrencies. These developments could also affect cryptocurrency markets.
