The current situation of the financial market is crashing at an alarming rate. Analysts are confused as what started with an upward progression is crashing without economically proven faults. Concerned or not, everyone is affected as prices of basic commodities are affected by the growth or possible decline of the economy.
Let me explain this so my 15 year old sister would understand.
Remember 2020? The world had just gotten the news of a virus that blew up quicker than a celebrity scandal. China had quite a few cases to start with and in a couple months, the whole world was on lockdown.
Next efforts…
The economic effect was fearful as companies stopped operations and many employees were on lockdown without a credible source of income. Food was pricy along with other necessities. The math was definitely not adding up with zero income and so much demand, then relief came.
The US government provided a first phase of funds to its citizens to the sum of 2.2 trillion dollars in total. Families and individuals were paid a monthly allowance to supplement for daily needs while schooling and rental services where subsidized or totally cleared to ease the tension.
But, where did the rest of the money go?
Recall that the 2.2 trillion dollars was the first phase of relief funds, there was more money given out on later dates. Also recall that the US recorded billions in online scams with monies intended for vaccines and palliatives diverted into rogue accounts.
This is where it gets interesting..
So with the average American enjoying money they did not work for, three things happened:
Americans bought unnecessary items from online stores resulting in the wealth spike of the Amazon founder on the Forbes list.
A lot more Americans were scammed because it’s easier to lose money you never earned.
People bought cryptocurrencies like never before.
You probably agree with the first and second but you’re not so sure about the third.
Here’s proof:
When the coronavirus pandemic shut down the economy, bitcoin’s price started to climb. By December 2020, bitcoin’s price had increased to about $29,374 — the highest it had ever been.
Remember people were not working, but there was free money.
Scammers had to hide funds where it was non traceable and secure, you guessed it, crypto.
Bitcoin started 2022 nearly twice as valuable as it was in January 2021, but before the first month of 2022 had ended, bitcoin had severely dropped into the $33,000 range in January.
Why? People stopped getting free money, some were yet to find work so they pulled out their crypto funds, and those who were already working decided to be a lot more cautious with their money.
So will the market continue to bleed? This would be quite difficult to say, however if it does crash continuously, it probably needs to regain balance and grow at a steady rate from it’s 2018 figure.
Yours financially😊,
Biodun…