What Caused Crypto Crash? Congress Hearing Of Crypto CEOs, IMF Or Omicron?

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Carlo Rovelli is an Italian theoretical physicist who founded the loop quantum gravity theory. He is attributed the following quote which makes your realize that you should never react too quickly in times of great upheaval. Carlo said:

When the dust settles, time, whatever it may be, could turn out to be even stranger and more illusory than even Einstein could imagine.

And so it is indeed as we enter Sunday and we’ve come to realize that although many thought Bitcoin would be reaching for $100k by now (remember those laser eyes earlier this year pasted on the Twitter pics of all Bitcoin maxis), it is in fact closer to $50k. Still a nice year end of course, but the carnage that was brought on by the Friday night fall proved greater than many had thought.

As stock markets digested the news that a new Omicron wave would probably eat away at the world’s economic recovery and more and more US states found cases of the variant, Bitcoin started to sell off ever quicker.

Justin d’Anethan, analyst for crypto exchange Eqonex, commented to Reuters that:

Whales in the crypto space seem to have transferred coins to trading venue, taken advantage of a bullish bias and leverage from retail traders, to then push prices down.

Midterms and regulation

However, some other analysts are of a different opinion and claim that the pending US Congress hearing of eight different crypto CEOs and executives, scheduled for Wednesday 8 December, could also be a cause.

Sam Bankman-Fried, CEO of FTX Trading and Alesia Haas, the CFO of Coinbase, will both be witness at the hearing, where progressive Democratic Senator Elizabeth Warren will aim to score points before next year’s Midterms and call for urgent regulation of the crypto sector.

Lastly, there were the comments by IMF Managing Director Kristalina Georgieva, who stated on Friday evening that:

A new variant that may spread very rapidly can dent confidence, and in that sense, we are likely to see some downgrades of our October projections for global growth.

Also not a good sign.

So who or what caused Bitcoin’s recent fall, Omicron, the IMF or Congress? At this point in time, the jury is still out and we will have to see how stock markets open on Monday.

Or as Rovelli famously predicted, we’ll just have to wait until the dust settles.

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