All I have heard for the past month, this is the end, here is another crash, its like 2017 all over again. I know it feels like that, and yes I completely understand the concern. Don't get me wrong, there is still a small part of me that is concerned. However, to understand why cryptocurrencies are falling, you must understand why the stock market is dropping. 

Reason 1: Inflation 

Most Americans, forget that we are currently have the highest inflation in over 20 years in the United States. As of writing this article our current inflation sits at 7.5%, a 6.1% increase since last January, 2021. Inflation alone is okay, we typically hover around 2% - 3% inflation yearly, which does not hurt our economy in any significant way. Yet at 7.1%, the FED likes to step in and tapper down our inflation by increasing interest rates which is what is concerning most people about their investments in the United States. The first FED interest rate spike should occur in March which is not for another couple weeks. My early estimate (Dec, 2021) was that the stock market would pump up until late February and rebalance in March. 

Reason 2: Russia 

This leads me to my next reason. With conflict with Ukraine and Russia increasing (allegedly) it is causing investors to sell off which speeds up the timeline and much worse could lead to a further drop in stock pricing. My assumption is Russia does not invade in Ukraine, Russia has not been promoting war in their media nor has been heavily discussed amongst Russian officials. This leads me to believe that Russia will not be going to war and just prolonging Ukraine's entrance into the EU. For comparison for my non-Europeans, treat Ukraine in this situation like Mexico and the United States is Russia. Imagine if Mexico joined a collation with Russia and was given millions of dollars worth of military equipment. You, an American citizen, would be pissed and would hope that your government prevented Mexico from joining this collation and getting their military bolstered by Russian equipment. That is pretty much what is going on with Russia and Ukraine. As of now, there is nothing to worry about, Russia has been dealing with a pandemic like the rest of the world and is not fully prepared to go to war, yet neither is Ukraine. Only time will tell what Russia will do, but my stance remains Russia does nothing as of now and this is strategic scare tactic to keep the Ukraine from joining the EU. 

On the other hand, I do not know why the United States is heavily promoting conflict between the Ukraine and Russia. Are our country this desperate that we need to reactivate the war machine to support our failing economy. Yes, for all of you that don't know. The United States' economy is failing. We are badly losing to China, overspending on our military, devoting resources to wasteful programs instead of promoting education and job literacy. We have whole sectors dying to shifting times, yet our government has not enacted any contingency plans to either provide new jobs and education for employees of dying sector or transition entire sectors like oil into renewable resources. The United States, like my ex, needs to focus on her self before she decide to go out into the world and spends more money. I am fully agree that deficit spending will help the United States, however, we need to spend it on good programs that will boost our economy. The US has tons of work to do in the next couple of years to catch up with the rest of the world, I just hope we not relaying on war to catch up with the rest of the develop world. 

There is some good news however! The stock market and the crypto market might both be down but it does present a great buying opportunity for people that have not spent everything they are worth in the market before it crashed (not me). 

The real good news is that the market is bottoming out, we can only drop so far before large investors can't hold their wallets anymore. Some of my favorite stocks have dropped over 30% in the last month due to the overall market falling, 30% lights up my eyes enough and have 2 cents in my bank account. If my eyes and wallet are starting that means then the large investors are starting to get hungry, most people are just waiting for some good news to pump the market. The new, sadly, has nothing to provide the market, and March will only bring bad news with the FED increasing interest rates. 

Suggestions:

If you are holding cryptocurrencies, and your holdings are more than 50% of your net worth then I would lower your investment and hedge against the market until you feel comfortable to reinvest your money. I plan on buying stocks and cryptocurrencies this week and next week, I know March might bring bloodbath, however, if you choose your investments correctly (highly oversold stocks/cryptos) then you should be okay even with the FEDs raising interest rates. I am going to write an article about stocks and cryptocurrencies I like for this year which might help some of you invest your money in these uncertain times.

Happy investing

- Hypothetical