Bloodbath in Crypto: Nigerian traders lose money as Bitcoin Crashes to 17K

By: Damian Okonkwo

The Crypto market has witnessed its most difficult moment last week with Bitcoin falling to two years low at 17,588 marking its lowest point since 1st October 2020. This has dealt a heavy blow to all crypto traders the world over; including Nigerian traders who have invested in Bitcoin and altcoins as a lifetime investment without bothering to take profits during the dip. Bitcoin has witnessed over 79% loss of value from its all-time-high recorded in November last year at 69K. Most altcoins have seen greater price crash with some losing over 90% value while some shitcoins rug pulled entirely with no hope of recovery.

So far the current dip seems to have exposed to all new crypto traders the risk involved in investing in Cryptocurrency. Thus there is no price regulation nor monitoring of the developers by the government. This gives room for the possibility of a rapid price crash as we saw last month in Luna coin and this month in Bitcoin without anyone questioning the developers.

What is the major cause of the crash in Cryptocurrency today？

There are two major causes of the crash witnessed this month in the crypto industry. We have explained them below:

Interest rate hike: The major cause of the crash in Cryptocurrency owes to the aggressive interest rate hike by the Fed last week during its session. The US Federal Reserve hiked its interest rate by 75 basis points notwithstanding the previous hike in May by 50 basis points. This has thrown investors into risk-off mode, leading to a major selloff in cryptocurrency by investors in the quest to invest in less risky assets such as the US dollar, Treasury yields, and bonds.

Crypto Cycle: Many analysts believe that cryptocurrency moves in Cycles. Thus while we experienced a little bullish cycle in 2021, analysts suggest that this year has been the bears' cycle. Hence the crypto market has remained bearish all through the first and second quarters of 2022.