We’ve spoken before about crypto currencies, the blockchain and decentralised finance before in some detail as alternative investment types, but what happens when the price starts to fall?
Not just crypto, but stock prices have been falling quickly too, with the tech heavy NASDAQ in the US hit particularly hard in recent weeks, with some companies losing up to 50% of their value since late November.
In that same period, the main coins such as Bitcoin and Ethereum have also been having a rough time, dropping somewhere in the region of a third, with other smaller coins losing up to 50% of their value in the same time period.
There are a number of factors at play when it comes to crypto having a rough few months, and we’ll try to address them here.
Why are crypto prices dropping?
Whilst cryptocurrencies are volatile by their nature, there are a number of other issues at play. First of all the global uncertainty caused by the situation in the Ukraine has destabalised global markets and caused price drops in not just crypto but in the stock market too.
There are also issues with gas and energy supplies, with a global squeeze causing inflation and price rises. Similarly, the inflation crisis across the UK and the US has been causing anxiety amongst investors.
There is also, however, concern that the Biden administration in the US are planning to bring in regulations and rules around the use of cryptocurrency in America. According to Investopedia, “This likely report from the administration, while welcomed by those who believe that Bitcoin can benefit from greater regulatory certainty, has triggered some traders to sell their Bitcoin holdings.
Bitcoin’s price drop from more than $68,000 to current levels just above $37,000 is equivalent to the cryptocurrency losing nearly half its value.”
Whether the President does bring forward regulations remains to be seen.
Property as an alternative
All this has led prominent property investors and landlords to re-emphasise the benefits of investing in UK property at a time when global economies are acting erratically.
Property in the UK has risen in price by an average of 10% year-on-year for the past two years, outperforming most investments and also providing a passive income along the way.
As a secure investment there’s not much that can beat buy to let property in the UK and certainly not across Manchester and the North West.
If you’re thinking about investing in property why not get in touch with one of our specialist advisors today than can provide you with expert advice and guidance.