Stock and Crypto prices won’t recover anytime soon
Over the last couple of months, we’ve seen stocks and crypto drop in value. In this article, I will explain why this is happening and how you can use this to your advantage.
The crypto and stock market haven’t been doing so well recently. A good example of this is Bitcoin, having dropped almost 10k since the begging of the year and the S&P500 being down 12%.
This drop in prices across the board was caused by the Feds. Earlier this year the Feds announced that they would increase the interest rates because of a problem they have been ignoring for years, inflation. The problem with increasing interest rates is that it might seem like a better idea to put your money into 10-year fixed-rate government bonds because they have a guaranteed return and increasing that return increases the number of people moving their money from stocks into government bonds.
Another problem with increasing the interest rates is mortgages. Increasing the amount of money you have to pay for a mortgage causes people to pull out of the stock market because they have to make sure they can pay their mortgage. It also prevents people with less money from investing because they can’t afford to lend money or invest the money they would have saved using a mortgage.
How can you use this to your advantage?
One of the best and simplest ways you can use the drop in stock and crypto prices to your advantage is by shorting stocks. Shorting is when you lend stocks from a bank sell them immediately and then after some buy them again and give them back to the bank with some interest. The aim of that is to bet that the stock will go down more than you have to pay them in interest so you can take whatever is left over as profit.
Conclusion
To conclude the current situation with stocks isn’t great but there are ways to still make money. I hope you enjoyed this article and If you want to support me leave a like, follow, or buy me a coffee (https://www.buymeacoffee.com/ccm7676). If you did not like this article, disagree, or have some feedback feel free to let me know in the comments.
