Why is crypto crashing? And what should you do to protect assets

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Cryptocurrency investors are on edge as the cryptocurrency market continues to fall. For example, Bitcoin has fallen more than 50% over the past eight months in an unreasonable downward trend. 

The U.S.-China trade war has been suggested as one reason for the selloff, but there’s no easy answer to why we’re seeing such an extreme dip across all coins, tokens, and assets in this space.

Why is crypto crashing?

If you’ve been wondering, “why is crypto crashing”. Just remember, how assets perform in the market reflects on current macroeconomic conditions. After the Global Financial Crisis, governments infused the economy with more money and capital, shooting up economic growth. Accordingly, asset value across the board increased. 

Currently, there is a looming economic decline in the economy affecting Bitcoin investment in Australia. Incessant inflation has curtailed consistent growth, and there are strong prospects of a recession. This places markets at the mercy of Central Banks, and increasing interest rates are a thorn to high-beta investments. 

How bad is the damage?

The recent crash did not come from the crypto domain. The S&P 500 recorded its worst performance since 1970. Nasdaq also declined, with a record low in 20 years. These recent market drawdowns have been tragic for equity markets. But Bitcoin drawdowns are a common phenomenon. In fact, Bitcoin has endured drawdowns of higher lows within the last decade – three times! 

As Bitcoin investment in Australia has been institutionalized and accepted into markets, so has its correlation to equities. In recent years, crypto’s correlation with high beta equities has gradually increased. When markets reduce risk to protect their capital, cryptos suffer. So, why is crypto crashing is a valid question to ask yourself. 

What is the future for crypto? 

At the moment, market prices are still low. But there are some signs that there will be some short-term relief. First, digital assets fall in the high beta asset class, and their value depends on the current monetary policy. With the deepening price depreciation, higher interest rates are nigh. Some higher data prints are in the offing, but Central Banks are overworking to derail inflation. Investors only need a “less bad” hawkish viewpoint to legitimize positive price action. In turn, there will be a turnaround in traditional markets and an inevitable domino effect on cryptocurrency

What should you do to protect your assets?

Digital assets present innumerable opportunities; despite the recent downward trend, you can still safeguard your investment. One attractive avenue is to enter at the reduced price levels. With the cyclical downturn, Bitcoin prices have plummeted, and any investor worthy of their mettle should see this as an opportunity. It is unclear whether it is at its worst, but the current market’s attractive prices should be lucrative enough for your seed money. But how do you do it? When looking at Bitcoin investment in Australia, seek the services of a digital asset expert to hold your hand through the process. They will offer you frictionless support, access to your options, and what will work for you best. 

Conclusion 

The cryptocurrency market has been in a bearish trend since the beginning of 2018. The prices of Bitcoin, Ethereum, and other major cryptocurrencies have dropped significantly in the past few months. So why is crypto crashing? There are several reasons for this crash, including regulatory concerns, theft, and market manipulation. However, there’s still some hope for crypto investors.

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