Wellington, Florida — “That was a hot mess inside a dumpster fire inside a train wreck,” CNN’s Jake Tapper once famously said about the Presidential debate. These words once again ring true – this time, however, for the May 2022 crypto situation. The crypto market lost over $600 million in value – in just the first week of May, per Globaldata. For those who missed the recent crash and burn of cryptocurrency, expert Brent Xu is here to give us the quick low-down we need.
How did this shiny new toy of billionaire investors fall prey to such a major blow?
Brent Xu says that the reasons are aplenty. Starting with the fact that the Covid-19 pandemic set us up for failure right from the beginning. But why blame the virus alone when raging wars and increasing inflation can be seen as equally guilty?
“There is no one primary suspect behind the bloodbath – every factor constituted a part of the reason behind why it came crashing down on us,” states Brent Xu.
Even as life in the US slowly returned to normal, distancing from Zoom calls and lockdowns, other uncertainties took over. Leading governments across the world began drowning in inflation levels, grappling to settle down in a post-pandemic world. The Federal Reserve System jacked up interest rates to match the inflation levels. Which, in turn, did not bode well for both – the stock market and crypto. Meanwhile, the Russia-Ukraine war is not helping matters, causing an environment of fear and panic.
Add to that the lack of liquidity in crypto markets, security breaches, and volatility influenced by celeb Tweets, which are causing real investors to steer clear of what they see as unstable investments.
Brent Xu points out that this isn’t the first time crypto has experienced a drop, albeit it was never this bad. But, he says, it is only a matter of time before we see crypto back in action, alive and kicking!