I think it is time we come up with an antonym of GM for the cryptoverse. Because whatever has happened in the past week, was not a ‘GM’ by any stretch of imagination. For some reason, 5% FD returns are looking quite lucrative now. But all of this is a part and parcel of life!
As I write this one, the OG BTC is more than 50% down from its ATH. Some altcoins are beaten blue as they exhibit a 70% downfall. In a nutshell, it’s not May, it is Mayhem. But what led to where we are today? Is it the fault in our stars? Or something else at play? So letโs find out the top reasons behind our portfolio carnage.
But before we do that, I would like to share a ray of hope. This is not the first time and you are not the only one.
A. Global Meltdown:
First of all, the crash is not specific to cryptoverse. If you are an avid investor, congratulations. You are being screwed left right and center. What I am trying to say is that even S&P 500 is also down by 15% from its 52w high. Back home, Nifty is slightly better off with a 12.5% correction.
If your regulated, relatively stable cousins are coming down like there is no tomorrow, I wonโt be surprised to see the notorious, volatile crypto chaps going berserk.
B. The Fed FUD
Feds have called for interest hikes to control the record high inflation in the US. We came down to this because excess money was printed in Covid to kickstart the economy. How much, you ask? Well, 40% of the total USD supply was printed in the last two years alone!
To wipe such enormous amounts of cash, interest hikes need to be taken. With interest hikes, the federal bank is essentially trying to safeguard the value of the dollar.
If you havenโt guessed by now, this is detrimental to the cause of BTC. Bitcoin at itโs ethos is a deflationary asset and as global currencies lose their value, it automatically accrues some.
C. Covid? Not again:
Chinaโs no tolerance policy towards Covid has yet again led to supply chain disruptions leading to the economic slow down.There are also fears looming around another wave which would further impact an already fragile economy.
D. The War and Other BS
Well, we come together to vaccinate each other at a record pace just to find ways to kill each other using missiles and weapons. Crazy right? The war between Russia and Ukraine has damaged the prospects of a quick recovery from Covid. There is just too much uncertainty that is creating a sell pressure, forcing people to sit on cash instead.
On the other side, Sri Lankan economy has gone to tatters. This has yet again created disturbance worldwide. Coupling it with Rupee falling to a record law against dollar has also caused ruckus.
E. The $LUNA Debacle
Here we go again. Another algorithmic stablecoin biting the dust. However, this time around, the wealth that was wiped off from the market was something never seen before. $LUNA and $UST combined lost $50bn of investorโs money.

To make the matters worse, LFG or Luna Foundation Guard had stored $1.4th worth of BTC to defend USTโs peg. When things got out of hand, they had to sell it at a loss. This in turn drove the price of the largest asset of the industry further down, still not helping their own cause.
F. The Divine Government Intervention:
India is a big market for crypto globally. If exchanges were to be believed, India has 1 million crypto investors. There’s another data that validates that India indeed is in the top 3 countries when it comes to crypto adoption.
If that is the case, it is highly likely that regulatory impact of India would be significant on an albeit global market. And we all know how Indian government thinks that crypto is a game of gamble.
A 30% tax is fine but 1% TDS intends to kill the speculation/trading usecase. If you want to dive deeper into my PoV on taxes, here’s a detailed unpopular opinion.
G. The Musk Effect:
Elon’s plan of accepting BTC as a mode of payments for Tesla skyrocketed the price to an ATH of $65K. However, then he pulled another trick out of his sleeves and took a U-turn. Ever since, BTC has not managed to reach there. For now, I think we need Musk to rescue us yet again.
He has been busy fiddling with Twitter these days and hence not been able to help us out in this enormous wealth destruction fair.
Whatโs Next?
If youโd ask a technical analyst, they would have varied opinions. However, the common theme across all of them is that this is not the bottom. Even the famous Robert Kiyosaki, author of Rich Dad, Poor Dad, thinks that BTC will come down to $18K. Thatโs when he would start accumulating.
Well, nobody can predict this with a 100% possibility. For now, go out and meet your family. For all you know, they might be pretty darn decent people you forgot about all these days. What is your bear market strategy anyway?
Got questions? Want to take it to the next level? Reach out to me using your preferred platform from the links below
Until next time..
For our beloved “non readers”, I also do quick carousels on these topics over Instagram. Come join the fun. Hit me up here.