Why Is the Bitcoin price and Other Cryptocurrencies Devaluing?

Bullfrog, Utah -With crypto crashing and the Dow Jones in a ditch these days, one has to wonder what’s going on? After all, wasn’t Bitcoin supposed to be the savior in a world dominated by big banks and over-enthusiastic feds?

Now however that Bitcoin is down some 50% off market highs in late 2021 and increasing interest rates bell weathering bearish market trends throughout Main Street, we must ask ourselves, what gives?

When all the major indices coincide with all the major crypto coins, something is amiss in the financial world. What’s wrong is that the crypto is going legit.

In the heady days of the first decade of this millennium, a tide of Anti-Government sentiment started to boil up. Hangovers from Y2K yielded mistrust of the big banks. The Great Recession of 2008 coupled with Bernie Maddoff and the big bailout shook the fringe-leaning wackadoodle to their core.

Preppers and Tea Partiers alike lost faith that the Government was anything but the boot of big brother, and the field was set for an alternative monetary system. Satoshi Nakamoto met this growing counter-culture with promises of decentralized power and Regulation Free finance.

By the time the alt-right was lauding Trump as their messiah, fever from the crypto culture was passing across Europe and Asia faster than a Government-sponsored pandemic, and demand for Bitcoin, Ethereum, and a dozen other crypto causes skyrocketed.

That brings us to late 2021 and early 2022 when the likes of Janet Yellin and Joe Biden began calling for regulation for stable coins and crypto, while every Edward Jones advisor hocking 401Ks and blue-chip bingo, recommended buy orders for darling comers like Bitcoin and Eth with their atmospheric growth.

Earlier this week when Janet Yellin made headlines in her comments before the Senate about TerraUSD’s meteoric tank down to cents on the dollar, she said “I think that simply illustrates that this is a rapidly growing product and that there are risks to financial stability, and we need a framework that’s appropriate.” The comments came in the wake of a March 2022 executive order and a 2023 Budget from the Biden White House, putting crypto in the crosshairs.

Anyway, you shake it now if the fed is watching crypto and Wall Street is adding it to their balance sheet, crypto futures are tied to Main Street America increasingly each and every day. So is it any wonder that the winds of recession aren’t causing a substantial blowback on the crypto markets?

It stands to reason, though, that if bears turn into bulls on Wall Street, shouldn’t the same prove true for Crypto? The fear, however, is much like the new kid on the block who is unproven when it comes to clutch plays in kickball. This is a first for crypto giants like Bitcoin.

While the alt metaverse seems to think themselves impervious to the heavy hand of Big Brother, they too get scared when their wallet starts shrinking, whether physical or digital. When they log on and see red arrows and negative signs next to their assets in Coinbase, they get a sinking feeling in their belly and many have started selling.

That includes all the weekend warriors who fancy themselves crypto ballers, who padded their Robinhood Gamestop stocks with fractions of bitcoin in January. It’s spring and the summer camps are back on now that the pandemic is fading from memory, and their 2.5 kids need fresh air. Seeing half of what they put into bitcoin in November on their May statements has to have them feeling a little hesitant to climb back in. After all they need cash now to send little Jimmy to sailing camp. They’re liquefying their assets, too.

With rumors of scarcity in the mega-mart and empty formula shelves topping the headlines today, coupled with rising interest rates, sinking stock markets, and looming recession, everyone else and the mother is looking for the easy out and the quick cash – cue the sell-off with crypto. When the next shoe drops and the housing bubble bursts, markets will sink even further.

Brighter days will come, and many more sketchy coins will go belly up, leaving the big boys like bitcoin at a more reasonable level. This is a good thing. And maybe some of the more petty players won’t jump back in when the ship rights itself. So grab your wallet by the bitcoins and ready yourself for a bumpy ride, because the times, they are a-changin’.

Thumbnail Credits: Christopher German

Sources:
1. Biden Budget Puts Cryptocurrency in Crosshairs

2. Yellen Cites UST Breakdown While Calling for Stablecoin Rules

3. Terra price today, LUNA to USD live, market cap and chart | CoinMarketCap

4. Why the stock market and bitcoin keep crashing – Vox