Archive: Wealth effect

The Fed’s Policy Tightening Mirage

By Adam Sharp on January 21, 2022

Bitcoin is “crashing” once again. As I write this, it’s trading around $39,000. It’s down from around $43,000 a week ago. Altcoins are correcting much more severely, with many down 15% over the last 24 hours.  As usual, all the crypto traders on Twitter are freaking out. They’re in a full-blown panic over a move that is very common for bitcoin. Probably because they’re using too much leverage, as I discussed…
The market distortions from the "wealth effect" are starting to normalize, which means you need to change your investment strategy.