In the last 24 hours, huge amounts have been wiped out from the crypto market. Billions of dollars were taken out of the market cap as cryptocurrencies like bitcoin lost almost 10% of their value over the same time period. Following this, Charles Hoskinson, the founder of the Cardano network, shared his thoughts on what caused the market to crash.
inflation is the culprit
Cardano founder Charles Hoskinson taking to Twitter Explained That high inflation rate was the reason behind the market crash. It’s no secret that the United States inflation rate has been climbing over the past few months, and the most recent CPI data report showed yet another spike in inflation, triggering panic in financial markets.
On headline inflation, the CPI data showed an increase of only 0.1%, while core inflation increased by 0.6%. However, these numbers, despite not being ‘large’ compared to the previous inflation growth rate, indicate that inflation was not slowing down. With the year-on-year inflation rate now sitting at 8.3%, this has triggered a massive sell-off in the market.
Hoskinson shared a CNBC report showing that the crypto market was not the only one hit in a sell-off with the release of CPI data. The DOW fell 1,200 points in a day, the biggest one-day drop recorded in the past two years.
Market cap drops to $951 billion | Source: Crypto Total Market Cap on TradingView.com
Hoskinson’s statements on inflation were, “I remember attending a dinner party in Abu Dhabi and sitting next to a famous economist who told me that inflation had nothing to do with printing huge amounts of money.” . The people in charge are a delusional cult. You get the bill.”
The crypto market has lost a total of $80 billion in the last 24 hours, bringing the total market cap below $1 trillion once again. Now, the market is looking forward to the FOMC meeting which is scheduled for early next week. This decision will also have a significant impact on the market. But before that, the Ethereum merge presents another event that could have an impact on the market.
Bitcoin’s strong relationship with the stock market is also having an impact on the market. This means that the recovery in the stock market will help with the recovery in the crypto market. However, with the rate of inflation remaining so high, the recovery may be far-fetched till there is some positive news.
Featured image from Forkast, chart from TradingView.com
obey Best Ovi on Twitter For market info, updates and the occasional funny tweet…