There will be a BITCOIN collapse

    

November 2021 will be remembered as the best

month for cryptocurrency so far.

Bitcoin (BTC), one of the leading cryptocurrencies

in the market, passed the $67,000 level, almost

reaching the $70,000 milestone.

Ethereum (ETH) on the other hand, hit nearly

$5,000, and the total crypto market worth

surpassed $3 trillion.

Early investors made a lot of money.

Those who bought the coin during its peak,

on the other hand, have seen their investments

plummet.

 About the crypto market

How is it doing now?

Will it be worse than the 2008 crash?

The Crypto Market: Bitcoin

Bitcoin's price has dropped to 20,000 dollars from

its November peak, wiping out more than

70 percent of its value.

In reality, the whole value of the cryptocurrency

has dropped by two-thirds, from 3 trillion dollars to

980 billion dollars.

People lost fortunes, particularly in retail

investors who bought well-known coins intending

to make more money.

That's equivalent to the stock market losing

more than 60 trillion dollars in value, sliding from 93

trillion to 30 trillion dollars.

The entire globe would be stunned.

However, because the crypto market is a minor

a portion of the stock market, so it is not producing

such a massive catastrophe that may shake countries,

such as the 1929 stock market crash, which was the

worst in history, with the market falling 89 percent

from its peak.

This resulted in the Great Depression, which

lasted over ten years and required a world war to lift

the countries out of.

If the market fell that far before the recession began,

what will this happen now that we have officially

entered a recession?

Interest rate increases are most certainly not over.

They will continue to rise until they reach 3 or 3.5

percent, which appears to be the level that will reduce

demand enough to halt the greatest inflation in

four decades.

The effects of a Recession:

 Laying off workers A recession is terrible, but

hyperinflation is considerably worse because the only

way out is to introduce a new currency.

Yes, if hyperinflation occurs, all of your

U.S. money will be worthless.

However, it is not only the United States

that is raising interest rates.

The Bank of England and other central banks

are raising interest rates and predicting a recession.

Many people are asking how the recession will

affect the crypto market if a 0.5 percent hike in

interest rates crash some coins like Terra Luna.

Which cryptocurrencies will weather the storm?

And how long is the storm expected to last?

We will address all of these concerns, as

well as many others.

The fact that firms are laying off workers

is quite likely the most telling symptom of a

recession.

Coinbase, one of the most famous cryptocurrency

exchanges, laid off 18 percent of its workers, laying

off over 1,180 people, and cautioned investors that

a possible recession might result in a prolonged

bear market for cryptocurrencies.

Another major exchange, Gemini, announced

that it will lay off 10 percent of its 1,000 staff.

Other exchanges and cryptocurrency organizations

have also stated that they are laying off 10 to

20 percent of their personnel in preparation for

a long recession.

Investors were concerned after what happened

at Terra Luna.

The Terra (LUNA) crypto coin first fell from

120 dollars to $0.02, representing a 99.9 percent

correction, with 99 percent occurring within 48 hours

of a black swan occurrence on May 11th and 12th.

The coin dropped even lower, reaching $0.0001.

But the significant deal was that it also

crashed TerraClassicUSD, which is a stablecoin by

99 percent.

The name should be enough to tell you everything

you need to know.

A stablecoin, unlike other crypto coins, is

tied to the US dollar, which means that one stable

coin equals one US dollar.

There are several reasons for the crisis, but the main

one is that the FED raised interest rates, which

spooked investors and caused the price to crash.

That is a strong sign that, no matter how

big crypto has become, investors do not trust

crypto enough to remain to hold it when the econom

is hit by a storm.

Institutional investors have entered the crypto

game, but it isn't enough because the industry

is still full of fraud and worthless projects.

Many cryptocurrencies serve little use in other

then to make money for their producers, so

investors must be cautious.

Crypto's purpose was to decentralize the banking

system.

But how can anything be used as money when

it is so volatile?

In fact, there are over 12,000 cryptocurrencies

available.

A currency is a medium of exchange, but aside

from the name, these cryptocurrencies have

nothing to do with currencies.

The whole point of them is to hype them up

until everyone starts purchasing, expecting

that this is their chance to get rich, and

then sell off when their prices skyrocket,

making developers and early investors rich.

Everyone else loses because the coin serves

no use.

It can technically be used as a currency,

but it is too little, and no one believes

it will not go bankrupt the next day.

In 2021, cryptocurrencies were used to defraud

investors out of about 14 billion dollars.

The developers would entice investors with

buzzwords like blockchain and defi.

We'll receive a lot of criticism for saying

this, but it's true.

Even if you don't like the truth, you can't

hate us for stating it.

Squid currency is only one of several examples

where developers drew innovations from the

Netflix show Squid Game, which quickly became

popular around the world.

According to reports, over 46,000 Americans

were duped by cipher frauds last year.

And that is just for Americans; the global figure is

undoubtedly greater.

As a result, as long as the industry grows

in accordance with the Greater Fool Theory,

it will not be stable enough for investors

to trust their investments during times

of uncertainty.

The Great Fool Theory

The Great Fool Theory basically states that

buying overpriced assets might occasionally

result in a profit because someone else will

pay a higher price for it later.

We hear a lot of forecasts about where the

future price of various crypto coins will

be, but none of them are based on anything

real because 99 percent of the time, it's

pomp and dump.

This is critical to grasp since recessions

expose everyone.

There is no cheap money to borrow and pretend

to have invented a groundbreaking technology

that is in high demand by using buzzwords

like blockchain, defi, decentralized, or whatever else.

The Crypto Storm

However, this is not the first time crypto has seen

a downturn.

The previous storm occurred between 2018 and

2020 when the price of Bitcoin fell from about

19,600 dollars to as low as 3,185 dollars.

That is an 85 percent decrease, and the price

remained in the 3,000-to-6,000-dollar range

for the majority of 2018 to 2020.

This time, though, the situation is different.

We still have institutional investors who

own a significant amount of cryptocurrency.

According to chain analysis, institutional

investors (anyone with more than 10 million

dollars to play with) accounted for 44 percent

of all crypto trading at the end of the second

a quarter of 2021, up from 8 percent the previous

year.

The storm will most certainly last two years

as well because the FED is unlikely to decrease

interest rates for another two years.

Because everything is dependent on inflation,

this is only a prediction.

Most cryptos will undoubtedly go bankrupt

since it makes no sense for miners to continue

mining the coin if it is economically untenable,

especially given the current energy situation,

which could worsen by winter.

It's tough to tell where the bottom will be,

but if it falls by 85 percent as it did during

the previous crypto storm, it may fall as

low as 10,000 dollars in the next 12 months.

Crypto firms have already suffered significant

losses.

Coinbase, one of the largest cryptocurrency

exchanges announced a 430 million dollars

quarterly deficit and lost over two million

active members.

That's only the beginning.

Withdrawals and transfers between customer

accounts have been halted at cryptocurrency

lenders such as Celsius and Babel Finance.

Other businesses are declaring bankruptcy because

they are unable to satisfy their debt obligations,

which reveals a lot about how these businesses were

just operating on cheap capital that was accessible

for the last two years.

Conclusion;

The storm has only just begun, so the true test is still

to come.