The crypto market touched a new low on Monday as the major tokens were trading with large cuts in the backdrop of rising inflation.
Bitcoin is trading at contraction of 7.92 per cent at USD 27,071.05 while Ethereum slumped to USD 1,400. The crypto behemoths were trading near 18-month lows leaving the global market cap to USD 1.2 trillion.
The sharp fall in the market seems to be a sell-off by investors amid inflation fears.
Founder of BitInning Kashif Raza explains why the global crypto market is going down.
Raza says that crypto and stock markets are highly correlated and said that it is due to global inflation which is 40 years high.
He said, “Stock market and crypto markets are highly correlated. Wall Street suffers the biggest weekly loss since January after hot CPI data. Tech-concentrated Nasdaq Index fell 3.5 per cent while technology companies have taken a beating in markets.”
Explaining several factors which are pushing the market down he said that recession could be deeper than the one that hit the global economy in 2008.
“Inflation is at 8.6 per cent in US, the highest since 1981. Inflation at 9 per cent in UK. There is a danger that the recession that is coming could be deeper and longer-lasting than the one that hit the global economy in 2008,” he said.
He informed that the New York State Department of Financial Services (DFS) became America’s first regulator to issue regulatory guidance for dollar-backed stable coins. No Algorithm based stable coins can be issued in New York state. After Japan, the USA and many more will follow.
However, amid the crash and depression in the market Raza suggest that one should take a break and see what mistakes they have been committing.
“Loss in Markets in addition to inflation takes toll on financial and mental health. These times could be depressing, the best thing at present is to take a time off and rethink your strategy and the mistakes that you have been committing,” Raza said.
What Is Crypto
Cryptocurrency is virtual currency—secured by cryptography making it nearly impossible to counterfeit or double-spend.
These tokens are not held physically like gold or printed central bank notes or coins.
They are mined using computer hardware and software programmes that employ blockchain technology through a network of powerful computers called nodes.
These nodes generate cryptocurrencies while maintaining a transparent and verifiable transaction record. Each coin produced is transferable between crypto accounts, and can thus be used to pay for goods and services in the countries where it is valid to use crypto as means of exchange.
Bitcoin, the first crypto on the scene, was created by software developer Satoshi Nakamoto in 2009. There is not an infinite supply of bitcoins; rather, the total number of mineable tokens in the bitcoin network is 21 million. This limited supply makes the cryptocurrency more valuable and thus more compelling for investors.
What Is Crypto Insurance
It is a policy which has been designed to protect investors against any losses associated with scams and cyber attacks. Most exchanges like Coinbase, Binance already have some insurance to protect the digital assets they hold for their customers.
However, It isn’t a legal tender. So, crypto insurance is different from that you can avail for your stocks, bonds or any other bank insurance. It is not protected the same way other deposits might be.
