In the last two weeks, cryptocurrency markets continued to tumble, causing massive destruction among many established cryptocurrencies like Terraluna and prompting employee layoffs among cryptocurrency exchanges like Crypto.com and Coinbase. The increasingly-alarming situation has led many to believe that the crypto rise is over, but we think things can still change if all investors have access to general indexes that can guide retail investor sentiments.
Red Hare NFT Index is Asia’s first top-performing index collection of the world’s top NFT collections. The asset can reflect investor sentiments and help investors in crypto’s recovery later this year and next.
Today’s cryptocurrencies are suffering from inflation, a struggling traditional bear market, and a number of other issues we’ll list in the next section.
The Factors Affecting Crypto’s Drop Today
Inflation
The Russian-Ukraine war is greatly affecting world economic policies, reducing the passage of raw materials needed to sustain various economies in different parts of the world. The prices of common goods and services on the market are increasing because of a lack of supply due to political restrictions and routing issues. As a result, many countries cannot export surpluses, decreasing supply and increasing prices greatly.
Gas Prices
The Russia-Ukraine war is a huge reason for global inflation because Russia is the world’s biggest oil exporter. With the sudden halt in delivering huge oil volumes, many investors have backed down from risky assets, initiating a huge selloff of cryptocurrencies similar to a traditional bank run. In doing so, many cryptocurrency values collapsed, with many cashing out their crypto into traditional fiat money.
High-Risk Profile
Cryptocurrencies are high-risk investments, making them the first to go among the many assets in most investors’ portfolios. In addition to cryptocurrencies, many investors have sold their shares in risky technology startups and low-demand businesses.
Fear, Uncertainty, and Doubt
Today, there’s a general sense of fear and doubt due to the uncertainty in the market and the rest of the world. Cryptocurrency isn’t in the spotlight as oil prices and restrictive policies continue to inflate the prices of goods worldwide.
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