Will the market keep bleeding for the foreseeable future?

As the year ends we all know that the markets have been on a downturn for the last few weeks and our EOY predictions have fallen flat on their face. But why is this and will it continue and for how long? Here are a few reasons why.

The Omicron Variant The stock market has taken a major hit recently because of the omicron variant. People are getting sick and some are afraid. Fear and uncertainty are never a good combination within a market which is why we’re seeing a dip (or a crash I don’t mind what one you choose). In my country for example, the UK, cases are rising sharply and we could see a lockdown come in on Boxing Day. People don’t like news like this and become show their paper hands. The stock market directly affects the crypto market, therefore stocks are down so crypto is down.

Crypto Currency Regulations Lately law makers in the US have been debating bringing in new legislation for cryptocurrency and having tighter regulations on it. Under a potential new law that has been considered by lawmakers, companies that facilitate crypto trades would be required to report tax information about those trades to the IRS (just as brokers of traditional investments like stocks do) starting in the 2024 tax season. They have also expressed their concern about the crime in cryptocurrency, this is a very unpopular topic among this community so please don’t shoot the messenger, stating that by bypassing the involvement of U.S. dollars in direct crypto-to-crypto trades, bad actors may be more able to evade public policy measures and other sanctions aimed at preventing money laundering or ensuring tax compliance. Hence their want for tighter restraints on stable coins which they want to treat more like banks. Here is a video showcasing the new crypto regulations: https://youtu.be/WtawhCQG-v8

China I have only recently learned this from a post on this sub today. China’s cryptocurrency ban from earlier this year has a delayed reinforcement. Meaning that popular exchanges in that country such as Binance have until the end of December to repay investors and liquidate assets. This has caused a lot of the bleeding at the minute as presumably hundreds of thousands of accounts are being emptied. I am curious as to if Chinese investors will stay away from cryptocurrency permanently or if this law will only take effect for the short term before people start ignoring it, similar to their recent gaming legislation.

So that’s it, what I believe to be the biggest factors in what is happening right now. If you wish to correct me on anything or add to what I am saying please write a comment and fill me in. Thanks for taking time out of your day to read this, have a great Christmas.