The Rise and Fall and Rise and Fall and Rise of Crypto

April 25, 2022
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Stop us if you’ve heard this before: A perfectly normal investment was suddenly manipulated by someone who figured out a way to backdoor a digital asset. Within a half hour, prices swung wildly. Scores of investors lost massive sums of money, everyone’s faith in the market was shaken, and authorities scrambled to find out what had happened, who did it, and how.

Of course, we’re talking about the “Flash Crash” of 2010 that sent traders on the Dow Jones, Nasdaq and S&P 500 into a complete frenzy; the market dropped 10% in minutes, then rebounded just as quickly. It was literally a trillion-dollar swing. What did you think we were talking about, cryptocurrency?

The individual who caused the flash crash by layering E-mini S&P contracts was Navinder Singh Sarao, and he caused the chaos by trading from a computer in his bedroom. For his part in the chaos, he was sentenced to one year of home detention. Yes, the courts decided that the best thing to do with a person who nearly collapsed the traditional stock market from the comfort of his own home…was to make sure he stayed in his home. We swear we’re not making that up.

The point of this exercise was to show that the crypto market, while prone to excessive swings, manipulation, and bad actors looking to get rich quick in any way possible, is not alone in that category. And while the traditional stock market is currently less prone to the massive swings that scare investors than the crypto market, it can certainly happen.

At present, the crypto market is in a holding pattern; the first four months of 2022 have seen a pattern of peaks and valleys resulting in very little gain or loss. The market generally follows Bitcoin, the largest asset in its class, and Bitcoin has bounced between $30-40k per coin for most of the year.

So, what does this bear for the future? “The market is uncertain right now,” says MacguyverTech CEO Steve (Mac) McKeon. “Between the correction after last November’s record high, the rate of inflation, and what’s going on internationally, people are hedging their bets. But I think the ‘Bitcoin to Zero’ crowd is about done saying ‘I told you so.’”

Indeed, the crypto market has been getting bad news for most of the year and it continued this week, with Ethereum’s transition to Proof of Stake being delayed until the end of the year. And yet, the market continues to hold steady.

“There’s just as much emotion and momentum in the crypto market as with traditional markets,” McKeon continued. “Everyone’s being careful now that the market has corrected; they’re just waiting to see the run start. But when it starts, it’s gonna take off like a rocket again.”

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