Will the financial crisis impact crypto?

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This means people are more likely to pull their pennies out of crypto exchanges like Coinbase and Binance when the economy takes a hit, and put them into traditional bank accounts like well, you know what current account options are out there. Some stocks particularly one related to healthcare, food and transport can even do well in a recession because theyre essential for daily life. Given that crypto isnt, you can see why most dont deem it to be a sensible investment.

When people pull money out of crypto, its bad for the entire industry. Theres a few reasons for this, one being that the overall market is worth less. With less money floating about, positivity can also decrease, as can general productivity within the industry. In the case of individual coins like Dogecoin to Bitcoin, when fewer people own them, more coins become available, in turn making them less valuable.

There are also some IRL consequences of the crisis. Bitcoin is very energy-intensive to mine, for example, and with the cost of energy going up and up, this means Bitcoin miners are going to have quiiiiite the bill. Same with other crypto-related businesses that operate from physical buildings and/or use a lot of equipment.

There is some optimism for cryptocurrencies that have been made legal tender in certain countries, though, such as Bitcoin. Global economy issues might make the countrys citizens more keen to seek alternative forms of currency, you know, which could potentially drive value back up again.

But its also worth remembering that crypto is still pretty small the entire market is worth less than Apple. Generally, it won’t really do a lot to affect the economy. A few people getting minted on NFTs isnt going to change the world.

The main takeaway is that less people are likely to HODL than they do during positive times, when we have a strong economy and sensible governments. Whether you see that as an opportunity to buy the dip or not is entirely up to you. Just please do your research. Be a bull or a bear sensibly. You have to in this economy.

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