The Market Is Falling Into Chaos: Why Is Crypto Only a Victim of the Economic Crisis

The current situation of the global financial market is no different from chaos, and no field escapes from this situation - even the cryptocurrency market is widely discussed. But let's step back a bit. What is really driving this chaos? It's not just about cryptocurrency charts or stock market trends. The story goes much deeper, reflecting larger economic and political forces that are reshaping the entire financial landscape. A broader context: Cryptocurrency is not an island It is fascinating to see cryptocurrencies as a unique and distinct phenomenon, but this perspective leads to a dangerous misunderstanding. The recession we are witnessing is not a problem of cryptocurrencies but a reality of the global market. Both the US and European stock markets are under pressure, and cryptocurrencies, as a smaller and more volatile segment, naturally amplify the general psychology. Why is this happening? The answer lies in macroeconomics and politics. The Biden administration and the Democratic Party are in the process of pushing through important legislation, creating an unstable environment. Traditionally, markets do not react well to political instability, especially when the policy outcomes could have far-reaching economic consequences. Chain reaction of uncertainty Investors, who control large amounts of capital, are very sensitive to risk. When uncertainty arises, their first instinct is to seek safety. This creates a predictable sequence of events: Switching to safe havens: Assets such as gold, US treasury bonds, and other 'safe havens' investments become a priority. The recent increase in gold prices directly reflects this behavior. Stocks decline: The stock market, especially in regions like the US and Europe, has seen a decline as risk appetite wanes. Cryptocurrencies are ultimately affected: Cryptocurrencies, as the riskiest speculative assets, are the last to feel the impact of investors' newfound confidence. Call for smarter conversations Given this situation, the cryptocurrency community—and the financial world in general—needs to elevate the conversation. Superficial technical analysis, focusing only on support or resistance levels, is not enough. Content creators, influencers, and analysts need to apply a more nuanced approach, integrating macroeconomic insights into their narratives. Cryptocurrency is not a silo; it is closely linked to global economic trends. Its performance reflects broader macro psychology, from central bank decisions to geopolitical changes. Ignoring this connection is a misunderstanding for both investors and enthusiasts. What lies ahead? Although no one can predict the future with certainty, historical models provide clues: As political instability subsides, we can expect capital from organizations to gradually return to riskier assets. Safe-haven assets like gold may stagnate as stability returns. The stock market is likely to recover first, while cryptocurrencies will follow as investors regain confidence. Responsibilities of thought leaders The financial world today demands honesty and depth from commentators. Simplistic analysis and recycled opinions do more harm than good. Let's strive to promote discussions that reflect the complexity of interconnected markets today. Investors deserve a comprehensive picture—not just the noise. By acknowledging larger forces at play, we can make better decisions together in navigating this chaotic period. It's not just about surviving a recession; it's about developing our understanding of the financial ecosystem. The market will recover, as it always does, but the key is learning from the lessons it teaches us in the storm.