This is another very good question. No one knows exactly why they are falling, right, why the markets did what they did.
But based on the conversations we had in The Journal with investors and some of these crypto evangelists, it’s a few things. Cryptocurrency has just become number one. It moved a lot along with stock markets, and especially tech stocks, some of those high-end, very risky bets that did very well in late 2020 and 2021, and a really good peak came at the end of November, so there are a lot of investors.
I recently made a video for The Wall Street Journal’s YouTube channel on how Wall Street really transitioned to cryptocurrencies. Wall Street investors have invested – invested – or sold about 10 times more cryptocurrencies in 2021 than they did in 2020. So you are literally seeing a 10-fold shift in Wall Street.
And this is good in terms of increasing the reliability and distribution of cryptography. But also, when these guys feel a little risk, they sell a lot faster than some of the true bitcoin and crypto proponents who believe in HODLing, which is just another way of saying they are holding crypto rather than selling at a low price. any circumstances.
So there are a lot more Wall Street traders involved. There was a lot of concern about risk. And bitcoin is still considered a risky asset. In fact, Bitcoin has no main use. Unlike things like gold or copper, some of the existing commodities it’s compared to don’t treat cryptocurrencies like a currency.
It is not usually used to buy or sell things. So there was this use case where people just sold it. In addition, many people receive margin calls, which means they borrow money and use that money to invest. And then when the stuff sells out and loses value, well, they have to sell more stuff to make up the money they owe or not pay it all.
So, there are many different things that affect the market, but none of them help the cryptocurrency market at the moment.