What the heck is happening with crypto…

What the heck is happening with crypto…

Crypto markets have dropped below one trillion dollars for the first time since early 2021 and bitcoin’s price is now below 23 000 which is its lowest point since December of 2020. There are a ton of factors that play a part in this market-wide crash. I’m going to go over all the things. You need to know about the crypto markets, what you should watch out for and what to do right now. So, first what’s causing the crypto markets to do.

So, poorly, well, I’m sure most of you by now. But, if you don’t, inflation hit 8.6% in May resulting in the fastest price increases in groceries, energy, and shelter since 1981. What’s even worse is – there is no sign of inflation cooling down anytime soon because the war between Ukraine and russia is still going on and the feds are likely to boost interest rates by three-quarters of a point this week. In order to reduce demand everyone’s portfolios are down right now. It’s indeed a scary time for all markets, not just for crypto itself, for example, the S P 500 is down 22 year-to-date. 

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The Dow Jones is down 17 and the NASDAQ is down. Almost 30 percent Bitcoin is doing even worse down over 50 and Ethereum is down 67 year-to-date when big fluctuations like this happen. Lots of new short-term investors tend to sell off all their holdings in reaction to the latest drop which could be further contributing to the drop across all markets now. A lot of people were winning from 2020 to 2021, but now that people are losing. t’s going to be a different game some people will learn from this experience and stay in the game. But most will, unfortunately, take this loss as a sign that they shouldn’t invest anymore in entrepreneurship. The losses are just as important as the wins and I think that it’s no different with investing. You need to learn from the failures just as you need to celebrate the wins.

But what else is new? Tons of tech and crypto companies have also paused hiring and some have even laid-off employees. Coinbase, for example, announced layoffs firing 18 of its staff and crypto.com CEO said that the exchange was laying off five percent of its corporate workforce. In addition to, crypto platforms real estate companies RedFin and compass also announced job cuts and even Tesla CEO Elon Musk sent out a letter to employees announcing plans to lay off 10 of the staff. The economy clearly isn’t doing too hot and some of the biggest companies like intel Nvidia, Netflix, Microsoft, Lyft, Snapchat, Meta, Apple and more are all slowing down hiring in response to the economic downturn inventory at major retailers is sky-high compared to sales. Homes are sitting on the market for longer with more and more price reductions. Overall, it’s just a crazy time for the economy, but it doesn’t stop there because there’s a lot more going on that’s affecting the crypto markets recently. We’ve seen a ton of cracks and flaws in crypto projects. If you haven’t heard by now, a crypto lender called Celsius has just gotten a lot of attention recently for their Shady Team members and business decisions to start former CFO of Celsius Duran Shalem.

Not sure, if I’m saying that right was the focus of an Israeli police probe for money laundering embezzlement, and other shady stuff. This, of course made, the community skeptical. But to make matters worse Celsius Ceo Alex Mashinsky replied to a tweet last week from Mike Dude saying that they were a risky business and the CEO asked him. If he knew someone who had a problem withdrawing from their platform well just recently Celsius pause withdrawals swaps and transfers between all accounts, so things aren’t looking too good for Celsius. If you look at their website they say you can access your crypto whenever but clearly that is not the case anymore. There’s a clause in their terms and conditions that is actually allowing them to do. This is why I always recommend having extra caution when it comes to these platforms. You’re storing your crypto in the safest place hands down is to store your crypto on a cold storage wallet like a ledger because this way you have direct access to your crypto at all times. It’s definitely sad to hear about the people that may lose their money with Celsius, especially right after what happened to Terra Luna. I think that this was really the last straw that brought the market down to where it is. 

Right now the attack ON ust already caused more than 55 billion dollars in losses for investors and it poisoned the people’s trust in crypto, especially, altcoins for a huge crypto lender like Celsius with over 1 billion dollars in assets to be associated with illegal business activities is terrible news. We’ve seen the shockwave hit the market in the last 24 hours since it was announced. According to Coingecko, Bitcoin is down more than 12.5 percent, Ethereum is down more than 17. If you zoom out the crypto market has lost over two trillion dollars since its November highs Celsius’s own coin meanwhile has dropped from a high of seven dollars last year. All the way down to 21 cents that’s why everyone says to never invest more than you’re willing to lose. When bear markets come, lots of crypto projects start to show how strong their fundamentals really are. If you don’t have a safety net, then you could be financially ruined. So, that’s why you should always have your emergency fund first before investing into things especially riskier things like crypto and definitely be safe.

You now while we’re on the topic of things to be aware of you should also be careful about where you connect your wallet in general. You don’t want to keep your crypto in your Metamask. Especially, if you’ve connected it to a website before to buy NFTS swap coins or make a transaction. Remember that anything online can be hacked. I mean just look at this guy who got his email hacked and lost all of his Ethereum overnight while he was sleeping. There has been a ton of hacks. For example, the biggest NFT marketplace open C. It was recently attacked back in February when 1.7 million dollars was stolen in a phishing attack. So, now that we have all that stuff out of the way. We can sort of move on to the most important part of the video which is what you should do. 

First, you need to take a good look at your finances to see if you should even be investing or not. If you don’t have an emergency fund you should probably focus on building that up first especially with inflation rising and the cost of pretty much everything going up another thing to consider is your income because the last thing you want is to be relying on your stock or investment portfolio. If you end up losing your job ideally all that money should you know stay in the market because that way you don’t need to sell at a loss. So, if you haven’t already I really encourage you to start a side hustle which you can learn more about through. Having enough income will not only allow you to put more in the markets when things are at a discount. But it’s also going to give you peace of mind, so that you don’t have to sell everything during a time when the markets roll down. Personally, I’m going to keep dollar cost averaging into my crypto portfolio because I see this as a huge buying opportunity for everyone that’s trying to invest for the long term. I see bitcoin’s price rising above a hundred thousand dollars at some point in the future and so to me it’s not a matter for you.

This article is a transcription of a video made by Charlie Chang

Original video: https://youtu.be/P0V5BI9Jc-k