Friday was just a prelude of what was to come and over the weekend with crypto slumping hard we all expected for the stock markets in general to be hit hard. Legit trillions of dollars left the overall markets in the course of just four days.
Crypto
Trading volume on crypto has spiked and the market cap has fallen to just 1.9 trillion. What blows my mind though is that we were not even at the highest market cap yet for the last bull run that crypto saw.
We have just been kind of hovering at that peak market cap all year with no real movements. However after today and the sharp sell off that movement was clearly down.
Stocks
The US stock market has also been hit but that's not the only one just take a look at the rest of the world...
Around the world markets have been selling off and selling off heavy.
What's Sparked This
Now any one person will try to target one thing that has sparked this overall market sell off. But it's really a combination of it all.
The first thing to come out was the jobs report which was horrible and showed the overall economy slowing down. This sparked people to say the fed is waiting too long before lowering interest rates. (In my opinion they are not and should keep them high for the rest of this year until inflation is 2% or less. This is because if we have learned anything from history is that if the rates are reduced too fast too soon it slams inflation higher then it's ever been and ushers in a recession.
The other part of all of this is tensions in the middle east going wildly out of control. It's also speculated that Iran is only weeks away from building their own nuclear weapon which is really going to change the dynamics of that whole conflict. I'd be much more worried about a nuke going off between those two countries and not Russia to be honest. My thoughts are this will blow up into a major war simply because Israel will want to blow up any possibility of Iran getting their nuke so they must act now. Once you have a nuke the entire game changes.
We also now have major competition in terms of the USD, BRICS and Crypto. Which I think we can kind of count crypto out at the moment with the bloodbath it has witnessed.
and last but not least we also have a economy that has been bailed out and propped up for the last 4 years after what should have been a recession during the covid lockdowns. We still have to pay the price for all of that.
It feels like the general overall world markets have just been stretched to their limits and have finally snapped. It wont take much to retrigger a higher sell off as the markets are going to be extremely sensitive towards any unknown and bad news which the world is currently primed for.