Fearful Impact of Global Recession on Crypto Market

Fearful Impact of Global Recession on Crypto Market
  • According to the IMF, the economy dropped from 6.1% last year to 3.2 %in 2022.
  • The crypto market dropped below $1trillion from its all-time high of $3 trillion.

Since the beginning of the year, the global economy has been in a gloomy and depressing state, and multiple incidents this year have had an impact on the market and increased the risk of tragic occurrences.

As per the official reports of IMF, China and Russia experienced major declines in world output in the second quarter of the year. The pandemic, the global COVID lockdowns, the war in Ukraine, and the collapse of the economies of the US and Europe are just a few of the events that have significantly harmed the world economy this year. 

As these all go into effect, the economy declines. According to the IMF, it is dropping from 6.1 percent last year to 3.2 percent in 2022. The IMF predicts a sharp decrease in global economic growth from 2.6 to 2.0 percent in 2022 and 2023. 

Inflation Worsens Crypto Crash 

The Ukrainian War and the US & European inflationary period largely influenced sharp declines in both off-chain markets & crypto markets. Eventually, the trend of traditional stocks such as NASDAQ and S&P500 and crypto assets such as Bitcoin and Ethereum were in correlation for quite a long period. 

Inflation rates of leading global economies such as the US and the UK hit their several decades high. Also, the crypto market got down from its peak of 3 trillion USD to 1 trillion USD. A series of crypto crashes and bloodbaths evaded the on-chain market. Many crypto brokerage platforms, such as Celsius, 3AC, and Voyager, turned into sinking ships in the market. 

Brent Xu tweet,

The fact that the global economic downturn has an equivalent impact on the crypto industry and the monetary system is still feared.