What’s wrong
The cryptocurrency market has another bad day on Monday and has been in that general trend for the past few months. After a rough weekend for most valuations, almost all major coins, including altcoin, went down in trading.
As of 12:30 pm Eastern Standard Time, Binance coin (CRYPTO: BNB) It decreased by 6.8% and decreased by 3.5%. Cardano (Cryptography: No) It decreased by 10.7%, decreased by 5.7%, but Polka dot (CRYPTO: DOT) It plummeted 11%, at which point it fell 7.1%. finally, Solana (CRYPTO: SOL) It decreased by 9.9% before a slight recovery, at which point it decreased by 6.2% in the last 24 hours.
Image source: Getty Images.
So what
The biggest story is still the whole market.The S & P 500 It’s down 1.4% as I write, but Nasdaq Composite Index Has decreased by 2%, and for highly volatile assets such as cryptocurrencies, the decrease will be even greater. Growth stocks have also fallen sharply, and cryptocurrencies have recently moved somewhat in parallel with them. Growth stocks and cryptocurrencies were big winners when a wide range of markets were rising, but now that markets are falling, they are largely lost.
However, there are two notable news items that are affecting asset prices on Monday, especially cryptocurrencies. First, interest rates continue to rise after the Federal Reserve has announced plans to begin shrinking its balance sheet in 2022. Interest rates on 10-year government bonds rose 1 basis point to 1.78% on Monday, rising 29 basis points. Last month’s point. According to historical standards, it’s still the very low interest rates on those financial bills, but rising interest rates tend to depress the value of more risky assets, which explains why crypto is down. It will help.
To make matters worse, Omicron can spread rapidly around the world and impact global economic and financial liquidity. According to worldometers.com, there were nearly 3 million new COVID-19 cases worldwide on Sunday. This is more than three times the highest daily peak of this pandemic’s past waves. Last week, the United States experienced an average of over 600,000 new cases each day. Even if the economic impact of this coronavirus wave turns out to be less severe than that experienced in the early days of the pandemic, this kind of news could plunge growth stocks.
One crypto-specific news item, for glitches not yet explained, Coinbase Account owners reportedly lost the ability to send and receive Cardano tokens over the weekend. Coinbase hasn’t revealed why these issues are occurring, but it’s not good for the largest crypto exchanges to have this kind of issue.
So
There may be concerns about the big moves in cryptocurrencies, but I don’t see the main reason for panicking. The value of tokens is declining along with the market and other high-risk / high-volatility assets, but not so surprisingly. One thing we can bet on is that wide swings will continue to be a hallmark of the crypto market.
This article represents the opinion of a writer who may disagree with the “official” recommendation position of the Motley Fool Premium Advisory Service. We are miscellaneous! Asking investment papers (even our own) helps us all think critically about investment and make decisions that help us become smarter, happier, and richer. It will help.
