A significant amount of money has been wiped out of the crypto market in the past 24 hours. Billions of dollars were taken from market cap as cryptocurrencies such as bitcoin lost about 10% of their value over the same period. Following this, Charles Hoskinson, founder of the Cardano network, shared his thoughts on what caused the market collapse.
Inflation is the culprit
On Twitter, Cardano founder Charles Hoskinson explained that high inflation was the cause of the market crash. It’s no secret that inflation in the United States has soared in recent months, and the most recent CPI data report saw inflation rise again, sparking panic in the financial markets.
In terms of headline inflation, according to CPI data, there was only an increase of about 0.1%, while core inflation rose by 0.6%. Despite the fact that these figures were not ‘large’ compared to previous inflation growth figures, however, inflation did not appear to be decreasing. With annual inflation at 8.3%, this has caused a huge sell-off in the market.
Hoskison shared a report from CNBC showing that the crypto market was not the only hit in the sell-off that accompanied the release of the CPI data. The DOW was down 1,200 points in a single day, the largest single day drop in the past two years.
Wiped Off The Crypto Market | Source: Crypto Total Market Cap on TradingView.com
Hoskinson’s statements about inflation were: ‘I remember attending a dinner party in Abu Dhabi and sitting next to a famous economist who told me that inflation had nothing to do with printing huge sums of money. The people in charge are a cult of delusions. You get the bill.”
The crypto market has lost a total of $80 billion in the past 24 hours, bringing the total market cap back below $1 trillion. Now the market is looking forward to the FOMC meeting scheduled for early next week. The decision will also have a significant impact on the market. But before then, the Ethereum Merge presents another event that could have an impact on the market.
Bitcoin’s strong correlation with the stock market is also impacting the market. This means that for a recovery in the crypto market, a recovery in the stock market would help. But with inflation remaining so high, the recovery may still be a long way off until there is more positive news.
Wiped Off The Crypto Market
Featured image from Forkast, chart from TradingView.com
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