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Four reasons for cryptocurrencies crash



With all its uncertainties, crypto is considered one of the most volatile instruments for investment purposes.

Cryptocurrency markets were reported on June 13, 2022, to have crashed to a new low this year.

The global market cap shrunk below $1 trillion to $977 billion, around a 12 % fall since Sunday.

The global cryptocurrency market cap fell by around $1 trillion this year while almost every top coin is now worth half or even less than their all-time highs.

Bitcoin, the biggest and most popular cryptocurrency, has fallen below $22,000 while almost all altcoins, starting from Ethereum, are bleeding prices since the weekend.

Below are four major reasons responsible for the crashing of cryptocurrencies in recent times:

  • According to Edul Patel Co-Founder and CEO of crypto investment platform Mudrex, the crypto market has been under pressure from the Federal Reserve, hiking the interest rates to combat inflation over the past few months.
  • As a result of a broad sell-off, following the data showing US inflation hitting a 40-year high, Bitcoin, Ethereum, and most cryptocurrencies suffered losses over the weekend.
  • As investors seem to have panicked, the number of crypto liquidations has been high since Friday. Bitcoin and Ethereum plummeted as much as 7% each and is currently trading at their lowest at US$25,000 and US$1,300.
  • The rising food, gas, and energy prices are also putting tremendous pressure on the crypto market as Bitcoin and Ethereum have witnessed double-digit losses in the past 24 hours according to another expert, Shivam Thakral, CEO of crypto exchange BuyUcoin.

In a nutshell, the immediate trigger for the crypto crash appears to be a massive sell-off by investors amid heightened inflation fears and pausing of withdrawal by crypto lending service Celsius.

Investors are also continuing to stay away from riskier assets, resulting in crypto price plunges which are reflected in the stock markets as well.

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