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After Luna's famous failure, Celsius fell apart, and then all of a sudden there were signs that Tron was also going to fail. Three Arrows Capital has a lot of money problems right now. No one knows who will be the next victim, but one thing is for sure: more people will be hurt.


The way the market is right now is helping to shed light on money and technology problems in the cryptocurrency industry. Web3 is a neighbourhood where things are not going well. If you are planning to trade Bitcoin, you need to see the Top 10 Benefits Of Investing In Bitcoin.



What do we think of bitcoin? Bitcoin and crypto are not the same thing, just to be clear. It's important to know how to tell them apart. There were 19,939 cryptocurrency projects when this article was written. Most of them began in the last year. Why are so many of these firms having such a hard time right now? Why do they both fail at the same time?


Are all of these businesses and projects just one big con? Is the Federal Reserve to blame for this problem? The problem is usually with cash flow, not always with the technology. There was a "gold rush" between the fall of 2020 and the spring of 2022, when the market was going up. Because everyone was so excited to go to the market, there was more competition. Because there was more competition, two things were likely to happen:



Why is it hard to get enough cash? What are quantitative easing and quantitative tightening, and how do they work? The Federal Reserve of the United States makes new money through a process called "quantitative easing." The Federal Reserve can make its own balance sheet bigger by putting money into the Fed accounts of sellers of mortgage-backed securities (MBS) and Treasuries.


The market for Treasury debt makes it possible for the Treasury to issue more debt, which will be paid for by future taxes and will be the responsibility of future generations to pay back. In other words, we're just putting off what's going to happen anyway. Since 2008, about $8.5 trillion have been added to the Federal Reserve's balance sheet.


Quantitative tightening is when the Federal Reserve stops buying Treasuries and MBS or buys much less of them while selling these assets on the open market. The Federal Reserve has let $45 billion worth of assets expire since the beginning of June 2022 without replacing them. But this has only caused its balance sheet to go down by $23 billion.



Because of this, the market's liquidity is under more and more pressure, especially in high-risk markets like the cryptocurrency market. The Federal Reserve wants to stop inflation, and one way they might do this is by raising interest rates and taking money off the market.


The market was like a block party until the beginning of 2022. At that time, a fire hydrant that was left open was giving the market a lot of cheap cash. The floodgates to the liquidity fire hydrant were opened by the Federal Reserve. The Fed is now trying again to fix that broken hydrant. It's time to go home.


As was said, they want to let the $47.5 billion limit on their current assets on their balance sheet fall by the end of this month. The same thing will happen again the next month, in July, and the month after that, in August, with another $47.5 billion.


Then, as promised, they will raise that amount to $95 billion beginning in September. It's important to remember that the Fed now has assets on its balance sheets that are worth $8.9 trillion. So, this process could take years if it isn't stopped by political, financial, or other large-scale events.



Not how they work, but how they can be used, is the problem with cryptocurrencies. Even though scams were common and easy to spot, everyone seemed to be having a good time and things were "doing so well." Who would have thought that free money was all the market needed to work well?


For the last bull market, every single token needed free money from the Federal Reserve (liquidity). The recent crash was caused by the policy of the Federal Reserve, which will change in the future. In other words, they'll come back to open that fire hydrant. So, you should ask yourself:


Why would you invest in or support a token or market that is vulnerable to an unstable policy from the Fed? Bitcoin, on the other hand, is already here, and recent changes in Fed policy have had no effect on it at all. This means the number has increased by more than 100%. That's a return of more than 100% in just two short years. In the next two years, the Fed might be able to raise interest rates.



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