The crypto market is down but experts urge calm

The crypto market is down but experts urge calm

The crypto market is down but experts urge calm

As cryptocurrency and other asset prices fall, some investors are panic-selling. But many experienced market observers continue to HODL even buying more at bargain prices, while urging others to stay calm and wait.


Crypto reacts to poor economic indicators

In November 2021, Bitcoin reached an all-time high of over $68,000, driving the value of the entire cryptocurrency market to $3 trillion. This week, as Bitcoin dropped below $30,000 for the first time in 10 months, total crypto market capitalization fell below $1.5 trillion.

Many investors point to actions by the US Federal Reserve, which is raising interest rates in an attempt to reduce inflation. A Labor Department report released yesterday showed April’s year-on-year inflation was 8.3%, a miniscule improvement over April’s 40-year high of 8.5%. And the situation is being made worse by the Ukraine-Russian war and China’s continuing COVID-19 lockdown.

Then, this week the TerraUSD (UST) stablecoin lost its peg to the US dollar. The token fell as low as $0.30 on Wednesday. The reaction was an avalanche of panic selling of most major coins.


What crypto influencers are saying

Amid the panic on social media are calmer voices unanimously urging everyone to resist the temptation to rush out and “buy high, sell low.”

MicroStrategy has spent just over $3.965 billion acquiring 129,218 bitcoins. CEO Michael Saylor remains bullish in the face of falling prices, and he’s not selling. On May 10, he tweeted, "MicroStrategy has a $205M term loan and needs to maintain $410M as collateral… If the price of #BTC falls below $3,562 the company could post some other collateral.” He concluded by urging investors to HODL on.

Bitcoin advocate Anthony Pompliano, who manages a $500 million portfolio, discussed entrepreneur Mark Cuban In a May 12 YouTube video. Cuban made a fortune during the 2002 dot.com frenzy and sees parallels to what’s happening now, tweeting that “Crypto is going through the lull that the internet went through.”

Pompliano confirmed that he has bought more Bitcoin since the recent market crash, even as some other investors have cashed out. “Every once in a while, experience and an understanding of history serves investors well. And this is probably one of those times,” he commented.

Fellow Shark Tank star Kevin O’Leary (aka Mr. Wonderful) also remains optimistic, telling Cointelegraph at Crypto Bahamas last week, “I think cryptocurrency will become the twelfth sector of the S&P. We will be paying 20-30% more when institutions start indexing this.”

“Guy,” the face of the popular Coin Bureau YouTube channel and a Bitcoin investor since 2014, said in a May 11 video, “We need perspective here. Crypto is not going to zero. It’s entering a painful phase of correction and retrenchment, but it will emerge stronger.” He also cautioned against Schadenfreude, pointing to numerous Twitter posts making fun of those whose assets have plummeted. “We’re all a part of the broader crypto community, and we should stick together at times like this.”

This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.

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