Bitcoin dipped (booo!) here's why...
Righto, time for our bi-weekly(ish) check in with Bitcoin and the crypto markets.
If you noticed the mood change in your YouTube recommended videos over the past week, from 'hooray for crypto!' to 'uh-oh'; this is why:
Bitcoin dropped from ~$24k to $21k, dampening hopes of a further price rally in the short term.
Here's why it dipped:
Markets love certainty, and at the moment, all anyone in the market wants to be certain about is the end of interest rate hikes.
Without the fear of another rate hike making their monthly repayments go up, people will feel comfortable taking out loans and investing their spare cash again.
The technical math on that, looks like this: more investment = higher prices.
Unfortunately, those in the business of reading the market tea leaves weren't convinced we've seen the end of hikes in the short term; after it was hinted in a transcript from a Federal Reserve meeting, that they would continue.
As a result, the market preemptively sold off some of their 'risky assets' (including Bitcoin), causing prices to dip.
Here's the absurdity of it all:
Imagine if someone stood out the front of your house, yelling its market value at you every time you left for work.
If one morning it was $500,000, and the next it was $450,000 - two things might happen:
You might call the cops, because, what the hell is this madman up to?? Is this a prank, or are you about to become a Netflix special?
You might laugh at the price fluctuation. Because it's still the same house it was yesterday, nothing has changed...so why the dip?
The same thing happens in the stock & crypto markets, the only difference is, the constant price adjustments are completely accepted.
And these short term price fluctuations very rarely have any long term consequences.
...which makes it all feel a little silly, no?
