Have an emergency cryptocurrency update for you right now because in the last 24 hours the crypto prices have significantly gone down. I want to talk to you about exactly why that has happened. I want to talk to you about what I think can happen with crypto prices in the future. So, if you are holding any type of cryptocurrency be it Bitcoin, be any type of altcoin – make sure to pay special attention because there are some massive macroeconomic factors playing out right now. We are going to have some critical dates that you need to be aware of and some critical information. You need to be aware of it as well.
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I want to kick it off by just saying on the cryptos on the crypto bubbles chart. Today you can see it’s basically a sea of red if we do go to the Coin Gecko charts right now. You can see some massive sell-offs in a lot of the big crypto. So, you can see Bitcoin down 5.9 percent. You can see Ethereum down 12, you can see a lot of the other cryptos are actually down in the double digits right now. So, a lot of the cryptos have actually fallen. So, what is going on and if we do take a look at Bitcoin’s price right now what we have seen for the last month or so and Bitcoin was holding up pretty well is that you could see Bitcoin kind of hovering around these 30 000 levels. But just recently in the last 24-48 hours. You actually have seen this big drop out of the 30k level, so we were seeing Bitcoin kind of maintaining the line at 30k, but just recently has actually dropped down to around the 27 500 level right now. So, it’s trading around the twenty-seven thousand five hundred dollar level and a lot of the other cryptos have actually massively fallen with that in particular. Ethereum has been a big standout as one that has dropped significantly. So, what is causing all this? What do I think happening right now. I do think a lot of it is coming out of the USA. It’s coming out of the federal reserve in the USA it’s the US economy right now that is up for big questions. You can see this article right here, it says the fed will raise rates in the week ahead, but what Chair Powell says may matter most next Wednesday. There’s going to be a decision by the federal reserve what they’re going to do with the interest rates in the USA. So, they have a meeting on Wednesday.
So, what Paul says? At 2 30 p.m this Wednesday is critically important to the cryptocurrency market. So, this doesn’t only impact the cryptocurrency market. It also impacts the global stock market as well and what the big issue is to kind of really summarize it up. We’re going to take a look at a graph soon. It’s the interest rates and the inflation rates. So, if we have a look at this graph right here, it shows us the 50 years of US inflation versus the interest rate. The line in green is the inflation rate, the one in yellow is the interest rate and you can see back to the 1980s. What happened with the inflation rate? It was extremely high, so it actually got up to nearly 15 percent, you know, in the economy right now. It’s running at about eight or nine percent but look at the difference where the interest rates were back in the 1980s. So, the interest rates were already up to 10 and they already went up to 15 percent. They actually nearly hit 20 percent back in the 1980s, but what we have in the USA right now is that the interest rates are still extremely low. So, you can see right here on this graph. We’re looking at the US fed fund rate as of right now, so if we zoom in right here. It’s only one percent but the inflation rate is around 10 percent. So, if we go back to this graph, realistically, so if the US was to counter the inflation that is going on in the economy. What they may have to potentially do is raise the interest rate to realistic levels. So, if the inflation rate is at nine percent in the future, they may need to get the interest rate up to ten percent. Something like that at some stage in the future to actually counter inflation.
This is causing all types of panic in the US economy. So, see people are saying if the interest rates go up too high, if you have a variable mortgage. If you have debt, what’s going to happen is a lot of people will not be able to repay that debt right now. So, there is a lot of uncertainty that is what’s causing a lot of jitters in the economy. Personally, what do I think is going to happen? I think there is a good chance there could be a recession for the US economy right now and it’s because there’s too much debt in the system. It’s because there’s too much inflation in the system and this may potentially decrease some of the stock prices. It may potentially decrease the crypto prices a bit further as well. So, there is a huge amount of global fud happening right now in the economy and the big question is this something to panic about as well in the crypto market. So, I am a believer also of long-term investing in both cryptos and also the stock market as well. So, if I do take a long-term view of crypto like Bitcoin and you do zoom out for a maximum of 10 years or so you can see it is in the long term where you do make good potential in the crypto space, even though crypto prices. They are dropping currently if you’re on the crypto market for a long period of time, nothing to panic about. In my opinion, and again if you take a very long-term look at the stock market as well. So, I’ve got the Dow Jones right here, so short-term traders may be panicking from a six-month window because it has dropped from 36 000 points down to 31 000 points. But if you do zoom out on a long-term horizon right here. You can see even though you have these big crashes back in the 1980s – the 2000 dot-com bubble and things like that over the long term.
What generally happens is the prices still continue to rise? So, even if we do have a catastrophic collapse which some people are predicting. I do think if you do have a long-term horizon – nothing to worry about but we’re just gonna find out what’s gonna happen in the future. You have to remember what am I doing in the crypto space and why I’m diversified into cryptos and stocks. I also am invested in levels.
I am comfortable with it as well, so I do think it is a matter of personal preference. What do you do with your money? If you’re comfortable with your levels of risk. If we do see a downside, Bitcoin goes to 25 000 that could potentially happen. We’ll find out where the price of Bitcoin is going to go in the future. But right now, this is what’s rattling the global economy. This is what’s rattling the stock market and it’s just going to be very interesting to see how this plays out. So, next Wednesday we’re going to have a decision that’s probably going to impact the cryptocurrency market and that’s going to impact your cryptos. What are you holding right now?
This article is a transcription of a video made by Crypto ZEUS
Original video: https://youtu.be/QrgX8Rb-61A