The crypto market has seen a significant drop in value over the past 24 hour. Market cap was wiped out by billions of dollars as cryptocurrency like bitcoin lost approximately 10% during the same period. Charles Hoskinson (founder of Cardano Network) has now shared his views on the crash.
This Is What Inflation is All About
Charles Hoskinson is the Cardano founder. explainedMarket crash was caused by high inflation rates. The inflation rate in the United States has been rising over the past few months. According to the latest CPI data report, there was an additional increase in inflation. This panicked the financial markets.
The headline inflation data showed a mere 0.1% rise in inflation while the core inflation was up 0.6%. However, despite these numbers not being ‘large’ compared to previous inflation growth rates, it showed that inflation was not slowing down. It caused a huge sell-off of the stock market with the current 8.3% annual inflation rate.
Hoskison provided a CNBC report that revealed that crypto was not the only victim of the sell-offs that followed the publication CPI data. One day after the release of the CPI data, the DOW plunged 1,200 points. It was the worst single-day fall in over two years.
Market cap drop to $951 billion| Source: Crypto Total Market Cap on TradingView.com
Hoskinson’s statements on the topic of inflation were, “I remember attending a dinner party in Abu Dhabi and sitting next to a famous economist who told me inflation had nothing to do with printing massive sums of money. They are delusional. You get the bill.”
Over the last 24 hour, crypto markets have lost $80billion. That brings the market total to $1 trillion. Markets now look to the FOMC meeting, which is scheduled for next week. This decision could also impact the market. However, Ethereum Merge will be a key event in the future that may have an impact on markets.
Bitcoin’s strong correlation with the stock market is also having an impact on the market. A recovery in stock markets would also help the cryptocurrency market recover. With the current high inflation rate, recovery could be difficult until positive news is available.
Featured image by Forkast. Chart from TradingView.com
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