THECRYPTO.WATCH – News of the crypto market crash at the end of 2021 has made some traders worried. So you have to be prepared for various situations.
The biggest assets, like Bitcoin and several other coins in the crypto market plummeted. On Thursday, January 6, 2022 amid pressure from investors selling. This occurs as the minutes of the meeting of the US Central Bank or the Fed have been released.
Several Crypto Coins Plummeted
The Fed has decided to raise interest rates as a result of a spike in inflation. The plan was implemented faster than previously estimated.
The decline in asset prices followed the decline in the value of the US stock market. According to CoinMarketCap there was a decline for Bitcoin of 5.56 percent. This sharp decline in a short time after Bitcoin had experienced in December last year.
The decline in the price of Bitcoin is also in line with the liquidation value, which fell to US $ 222 million. Equivalent to a value of IDR 3.19 trillion if the exchange rate is assumed to be IDR 14,350 per US$.
The coins with the top market cap are also in the red zone. Ethereum is in second place as the crypto market plummeted. Ethereum coin experienced a 6.76 percent decline. The same thing happened to BNB and Solana.
Binance experienced a decline of 7.07 percent. Meanwhile, Solana experienced a decline of 8.33 percent. It can be concluded that overall there was a decrease of 5.78 percent.
Why Crypto Markets Plummeted
The basic thing about crypto assets that you need to understand is that investments are speculative and have volatility. It becomes constant. Another view is that Bitcoin’s sell-off is indicative of moves such as technology stocks.
Bitcoin proponents say that digital gold is in limited supply. Only 21 million coins, with 18.92 million coins have been mined. So that it cannot decline like fiat currency which is prone to inflation.
Another opinion mentions a flash crash, the cause is that Bitcoin still cannot act as an alternative asset. The reason is that Bitcoin is still under pressure from the Fed.
However, US Investment Bank Goldman Sachs stated that there is a possibility for Bitcoin to take market share. Prediction of price increase is still possible even in the next 5 years.
The crypto market plummeted when financial markets were volatile. The Central Bank tightened policy and sought to reduce liquidity.