Tag Archives: money

What Is Going On With The Banks In The US?

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It’s been all over the news over the past couple of weeks that it’s not good news for certain banks in America, particularly Silicon Valley Bank, which announced its bankruptcy last Friday. Well this may not affect us directly, it’s very good to know what happened and of course why.

Silicon Valley Bank catered to many tech investors in the US, hence the name. It was taken over by federal regulators on Friday, leading to the largest bank sale in the US since the global financial crisis of 2008. Following this bank’s collapse, was New York’s Signature Bank on Sunday also collapsing, for different reasons due to its exposure to the crypto market. As you can imagine, the news of these led to a bank run last week, where depositors rushed to withdraw all their deposits from the bank. This inevitably led to the bond market swinging wildly, but why did this happen in the first place?

Like the age old saying, what must go up, must come down, and this is true in this situation. Catering to mainly tech developers and companies, Silicon Valley Bank boomed during Covid, deposits totaling over US$100 billion. Then, in 2021, when interest rates hit a record low, this bank invested billions of dollars into US Treasury bonds. Whilst bonds are generally safer investments, with steady gains, they only pay out in full if held to the maturity date. This poses a risk to bond investors if interest rates rise.

Lo and behold, we all know what happened-interest rates went up. This meant that Silicon Valley Bank had to sell at a loss. Not only was this a problem but it happened to come along with the whole tech sector bubble apparently bursting! We’ve all heard in the news and experienced friends, colleagues and family members possibly losing their jobs in the tech sector. Tech companies have been increasingly withdrawing their money from the bank. In order to comply with these withdrawals, SVB had to sell its bond holdings, at the loss of US$1.8 billion. Not only that, SVB also announced that it would be selling more of its shares, a hint that they require more cash! This shook its customers, causing even more people to withdraw from the bank.

On Thursday, customers at this bank try to withdraw 42 billion USD in deposits and the banks shares dropped more than 60%. By Friday, it was all over the Silicon Valley Bank.

While not all banks are in this niche of only catering to tech companies, this did spark concern about the banking sector, especially when the second bank, New York’s Signature Bank, collapsed on Sunday. This actually has had a knock on effect to more traditional banks; JP Morgan is down more than 7%, with Wells Fargo and Bank of America down more than 15%. Many bank analysts have stressed that there is no liquidity crunch facing the banking industry and that, it is more so a human fear that has gripped the market, and a self-fulfilling prophecy has been played out.

Luckily, those that had ties with the banks that have gone bankrupt, will have full access to their deposits, even those that exceed the limit of FDIC insurance. So at least there is some relief there for their customers.

President Biden remarked that the banking system is safe, but the markets did react strongly on Monday; we saw the US stock exchange go up and down with immense volatility over the course of the day. Not only that, government bonds yielded lower than expected. But the main thing that we must look out for is whether this will have any effect to the Fed’s decision next week…

The Federal reserve will meet next week to discuss whether it will raise its benchmark interest rates yet again. The rising interest rates have helped to slow inflation, but it has also devalued bonds and has somewhat led to the collapse of banks such as SVB. Hopefully, the Fed realises that if it continues to rise interest rates, more banks could fall victim. This might put the Fed under some pressure to ease the increases.

What does this mean for us in Asia? Well, luckily we may not be directly affected. For me personally, I see this as an opportunity to go into bonds when they are at a low. Generally, when equities are down, bonds are up. We have seen equities go down for Long time in the market now, which I hope means that bonds, after this little blip, will continue to go up. Of course, I cannot predict the market but I always see these kinds of situations as a great opportunity!

What challenges are coming to Singapore in 2023?

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I didn’t want to start of the year with a depressing post, and I assure you it isn’t going to be one, but I thought it would be useful to people to be informed on the changes that are coming to Singapore that will directly affect us this year.

  1. GST Increase

As everyone knows, GST has now increased from 7% to 8%, meaning that things are generally more expensive. Not only does this apply for small things like going out for drinks or doing the grocery shopping, but I think people, particularly expats, will feel the pinch when it comes to paying for their child’s education. International school is already incredibly expensive, and with it being very difficult to get into the state schools, it is pretty much the only option for most people with families over here.That one percent extra makes all the difference, actually. I have Heard of a few international schools allowing the parents to pay for their 2023 bills in December, meaning that they are still paying at the 7% rate, but of course of December is over and moving forward it will be 8% across-the-board.

2. Rental

I’ve been talking about this topic a lot because it directly affects me and is most expats in Singapore, because most of us do not own a property here. Unlike the UK, which I’m used to very good laws that protect the tenants, Singapore does not seem to have this. There seems to be no glass ceiling when it comes to rental prices over here, and actually, a lot of expats when considering relocating to Singapore, should take into consideration how much of their salary is going to go on paying for rent! I do wonder when the rental prices will stop increasing, and I’m hoping that in 2023 it will stop, but there is no way to be sure.

3. Means Testing For Medical

From the end of 2022, the Ministry of health have decided to implement a subsidy framework across healthcare. This of course is to help those from lower income households, who may find medical bills too expensive. This method calculates the subsidies that people will receive based on their household income, so that the government can give assistance to those that need it most. While this is great for those who really need it, there are some factors to consider that will affect all of us. The first is opting for government hospitals instead of private.

Generally, going to a government hospital means that it is a lot cheaper than going private, but of course, this is more appropriate and best saved for people who really need it, on lower income households who qualify for the mains testing. Expats in particular are rarely included in these kind of schemes, which means that generally our healthcare will still stay as expensive. And don’t forget, the Ministry of health have also implemented a drug list, which means that if you are on medication that is not on this list, you may not be able to claim it on your insurance!

4. Inflation

This seems like a really scary word now, last year Singapore reached an all-time high with its inflation rate. While the Monetary Authority of Singapore has tried to curb this, by appreciating the currency and tightening policies to try and curb the upward prices, I still think that inflation will affect us in 2023. We can already see that things such as groceries and Energy bills have increased, what will this be like in 2023? I do think that the government has done a very good job at plateauing the inflation rate, but it has plateaued at a very high point. I am looking forward to seeing it decrease in the future.

5. Recession

While the unemployment rate was very low last year in Singapore, there is something that us as expats must think about; retrenchment. Due to the recent recession, we’ve seen a lot of companies cutting people on Employment passes and S passes, and employing more locals who they don’t have to fork out large levees or salaries for. Of course, this is great for the locals, and I do think that it’s wonderful to see a country put so much effort into supporting its local citizens, but this could greatly affect expatriates living and working in Singapore. Reshuffling of large organisations could mean relocation or retrenchment.

Not only that, I have seen a real competition for S passes due to the quota system. An S pass has changed a lot over the years, with its salary for some even being comparable to those on an Employment pass, but there is strict criteria and quota that each company needs to be able to employ someone on an S pass. Leading to shortages in some companies. Not only that, as we get older and we gain more work experience, our work passes become more and more expensive to renew for the employer. This could spike the increase in unemployment rates in the expat community.

Despite all of this, of course, I still love living in Singapore and consider it my home.

I’m sure that these things are just challenges that we will have to overcome, and will not continue forever. There have been worse economic periods in the past, this is not the worst that could happen! I’m still incredibly grateful to live in such a wonderful country. Here’s to a wonderful 2023 ahead!

Top 5 Money Hacks For Students

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Moving to university is an exciting time- meeting new friends, experiencing new things and for most, living on your own for the first time. Whilst this may seem like a dauting new venture, it doesn’t have to be! Living away from home is an incredibly rewarding experience, when you can be your own self and learn life skills and become responsible. However, living away from your family comes with a lot of challenges; particularly money. If you’re wondering how to cope on your own handling your own finances, here’s my Top 5 Money Hacks For Students!

  1. Create A Budget

I’ll get the boring one (but the most important one) out the way first. Calculate your income for the year (or term if this is easier to calculate). This means adding up all your student loans, grants, bursaries and part-time job salary (if you have one). Then estimate your fixed expenses, like your rent or student housing, books, bills and groceries.

  Try and estimate what you have leftover. If you have a surplus, set aside a portion of this (maybe 20%) for entertainment & travel (university trips and holidays are a great way to bond with uni friends!) and the rest you can save for future needs.

2. Join The Student Union

The Student Union (SU) is a great place to have fun on a budget! Join a club or society for a small fee and these clubs will organise events all throughout the year. Most of these clubs have a budget set aside for these members’ events…minimising the cost for you! They’ll be movie nights, sports events, quizzes and maybe even meals at the SU for you to attend! *Bonus tip- food at the SU tends to be a lot lot cheaper than going to other pubs or restaurants.

3. Do A Big Shop

Studies have shown that doing a grocery shop once or twice a month is a lot more cost-efficient than once a week. But, how do you do this effectively, without over buying? First, write a list; try to include a lot of dry items that you can use for multiple meals, such as rice and pasta. I’d also recommend including tinned ingredients to your list, such as tinned tomatoes and different pulses and beans. These can be the base for many meals, such as pasta sauces, chilli or curry. Secondly, buy frozen vegetables or items that can be kept for a long time in the fridge or freezer. This minimises the chance of your food going off and you wasting good raw ingredients. Check your cupboards and fridges before your shop, whilst making your list, to avoid duplicating anything. And of course, shopping in large supermarkets is a lot cheaper than shopping at corner shops or convenience stores. Try and shop at these places as little as possible, unless you run out of milk or loo roll!

4. Be Conscious Of Your Electricity & Gas

I wish someone would have told me how expensive gas and electricity was! To minimise my bills, I seldom turned on the heating (blankets in student accommodation and cosy pyjamas are a must!), and make sure that lights are switched off when you’re not using them. It sounds like a pain but it really does help keep your energy bills down.

5. Second-Hand Is Awesome!

Especially for books! I remember my first week of university, I was told I needed to buy a specific biology textbook. I went straight to my local bookstore and bought a brand new one for a whopping £60! I used the textbook twice my whole university studies…a lot of my classmates bought the textbook second-hand for about 20 quid! From then on, I stuck to buying all my textbooks on eBay; it really saved me a lot of money.

These five tips are simple, but if implemented well, can save you a lot of money at university! Remember, having fun doesn’t mean having to spend a lot of money!

The Top Ten Most Expensive Cities In 2022

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Every year, Mercer rank the world’s most expensive cities to live in; the criterium is based off of things like rent, transportation costs and food. This year we’ve had a lot of volatility in the economy, exacerbated by the war, inflation rate and interest rate hikes. So, how did this affect the listings this year? Let’s take a closer look:

10. Beijing

Beijing is still a lot more affordable than the other cities on this list, but the main reason it has become increasingly more expensive is due to its population size. The city’s increasing population has caused rental prices to double over the past ten years.

9. Tokyo

Tokyo is in this list year after year. Japan in general is a country with high cost of living expenses, such as rent, owning a car and transport in general.

8. Singapore

Here we are, Singapore. No one is shocked to this here- over the past year rental prices have shot up astronomically and the lack of land will always mean that property purchase is expensive in comparison to other countries. Speaking from personal experience, going out for food and drinks can be particularly expensive, taxis, whilst cheaper than the UK, have increased over the past year and we all know owning a car is pricey in Singapore.

7. New York City

NY has always been more expensive than other places in the US, particularly rent. If you haven’t read my article, ‘Sex and The City, and Broke’, please do! I have always been baffled by how people on low to mid salaries can live comfortably in this city

8. Tel Aviv

A common theme on this list is rental; this seems to be the main reason cities land here, and the same goes for Tel Aviv. Whilst the city has a tonne of stuff to do for tourists, including bars and restaurants, this comes with a price tag. This means that rent for a one-bed, on average, is about 1725 USD a month!

5. Bern

We’re getting to the part of the list now where most of the cities are in Switzerland. A week-long holiday to the capital city would cost a family of four approximately $6000!

4. Basel

This city has a great art and history scene; Switzerland’s oldest university city is home to beautiful modern architecture and the world’s biggest art fair. This comes with a whopping price tag of living expenses of approximately $3000 a month.

3. Geneva

Similar to the previous Swiss city on this list, living in the luxury city of Geneva would cost you approximately $3500 a month. Very pricey!

2. Zurich

The financial capital of Switzerland sits at the second spot. It’s the most expensive Swiss city to rent, and the city itself is choc a block full of high shopping and decadent restaurants, so it’s very difficult to escape the high cost of living in Zurich.

1. Hong Kong

Are we shocked? HK has over 7 million people living in the city, meaning that the demand for housing is incredibly high. Not only that, food, transport and nightlife is also very expensive in Hong Kong. One thing I will always remember is watching a documentary showing people in HK living in literal cages, with a bed, TV and all their stuff. These types of housing have a shared bathroom and small kitchenette and can cost about 500 USD a month! That’s so expensive for such a small, cramped space.

In my opinion, I’m not shocked that the vast majority of these cities are European (40% of this list are in Switzerland!) and I’m actually surprised that London wasn’t now in the top 10 (it’s 15th). I did think that where we live, Singapore, would be higher because of the high cost of alcohol & rental, but I guess our lower taxes and the fact that the government are able to stop inflation and utility bills from getting out of control helps. All in all, this list is very useful when it comes to someone making a decision to move overseas.

Did this list shock you? Is your city an expensive place to live?

FIRE Movement; What’s it all about?

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The term ‘FIRE’ seems to be all over the news lately, what is the hype and what does it mean?

FIRE stands for ‘Financial Independence, Retire Early’, and this is a movement that we’re seeing as of late, whereby people are leaving the workforce as early as they possibly can. They do this by focusing on scrimping and savings as much as they can now, in order to save the maximum amount for their retirement. This means cutting down on all unnecessary expenses; eating out less or almost never, not taking any holidays, even working a part-time job on top of full-time employment to earn extra income, and using all of the surplus cash to stringently invest and save. This can be quite extreme; leaving the workforce early is maybe one of the biggest financial decisions of your life, so you need to make sure you have planned correctly.

There are actually a few kinds of FIRE, which I will delve into in this article.

Fat FIRE

If you like the idea of retiring early, but don’t want to drastically alter your lifestyle to the point where you never go out or do anything fun, then Fat FIRE might be a method that interests you. Fat FIRE appeals to those who cannot keep their expenses low; if you have a family you need to pay for education, schooling, groceries, school uniforms etc., which are often difficult or impossible to trim (you can’t ask your kid’s school to lower their fees, for example). So how do you achieve FIRE with higher expenses? The answer, a higher income. Fat FIRE only works for higher income earners that choose not to fully embrace frugality. You can see this may not be for everyone- getting a higher income is easier said than done as may require certain experience, knowledge, education and so on, that might not be applicable to all.

Barista FIRE

This FIRE movement does just what it sounds like; working part time (in a café or otherwise) to supplement your retirement income. This might work for a lot of people; even I myself don’t want to do nothing during my retirement. Getting paid to do a passion-project as a free-lancer sounds like an awesome way to spend my time. This method of FIRE means that you don’t have to completely cut out all lifestyle expenses during your working years, as you know that there will be a part-time income rolling in throughout retirement. This is contrary to the next FIRE method…

Lean FIRE

Lean FIRE Method is really the extreme, hardcore or by-the-book method. Lean FIRE means you really live that minimal lifestyle right into retirement. This includes tactics like bringing your own water bottle and packed lunch with you when you’re out, taking public transport or walking from point A to point B and downgrading your rent by renting out a single room instead of a whole unit. Even someone on a lower income can practice Lean Fire, and put their monthly surplus into savings and investments. This method of FIRE really reminds me of the show ‘Extreme Cheapskates’.

Coast FIRE

In my opinion, Coast FIRE is the most realistic and less extreme method; it’s actually quite similar to the advice I give my clients; invest early and as much as you can, and enjoy the compound interest later in life. The earlier you start investing, the better; you have a longer runway and more time for that interest to accumulate. Holding your investments longer also means that you are able to tolerate volatility in the stock market.

FIRE can be studied in depth and is an interesting movement. Later on, I will explore further as to whether this method is sustainable. But, what do you think? Will you be practising FIRE any time soon?

The 52 Week Saving Challenge

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If you’re struggling to figure out a way to save money effectively, or you find yourself always waiting for your payday to come in, here’s a great challenge you can set yourself and see how much you can save!

This challenge is very simple; during the first week, try to save $1, $2 during the second week and so on and so forth, all the way up to week 52 where, you guessed it, try to save $52!

You can create a savings chart or tracker so that you can ensure that you’re saving every week, and I would recommend putting these savings into a different bank account, so that you’re not tempted to spend it!

This challenge instils great saving habits, starting off small and working up towards a big goal, and by the end of the challenge you’ll have saved a whopping $1378! You can put this money towards a big-ticket item, or save it for when you graduate or any other life stage. And if that was too easy, try the 52 Week Saving Challenge, followed by doing it in reverse, doubling your money!

Give it a try and happy saving!

How Influencers Are Ruining Your Idea Of Investment

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I wanted to write this article because I’ve been seeing lots of posts on Instagram (mostly) of influencers promoting different investments, often suggesting they have made a lot of money using them (and it’s mostly involving crypto), and I have a problem with that.

  Social media influencers have boomed in the past few years and, what was once a farfetched and trivial job is now a very feasible full-time career that many are choosing to pursue. People can now make a living by posting review video and content…especially if those reviews are sponsored. A recent study showed that 37% trust the opinion of social media influencers over brands, with Gen Z and Millennials twice as more likely to trust influencers over Boomers. I think that this statistic isn’t shocking or dangerous overall; watching reviews of products you are thinking of buying is a good way of practising your own due diligence. But it’s when paid promotions of investments start cropping up where it becomes an issue.

  Speculation is a term used in investing, whereby groups of people try to guess how a trend, portfolio, or stock will perform in the future, normally with just surface-level knowledge or research. This investment strategy is very risky and can be a factor to why monumental crashes (like the Great Depression) happen. If you watch any influencer’s video that is promoting a particular investment, trading platform, NFT or cryptocurrency, you will start to notice speculation. They will start hyping the investment up, usually stating that it has earned them X amount of money in a short period of time, or make bold claims that it will continue to grow, despite market conditions being down. This is incredibly dangerous for young, impressionable consumers, who trust whatever product these influencers are selling.

  The truth is, yes, these investments have probably made these influencers money…because they have been paid to talk about it. It is highly unlikely that they themselves invest or trade the product they are pushing, on a regular basis. Or worse, they may be using a pump and dump method; whereby them hyping up the investment may make lots of people buy, and drive prices higher. They then have the opportunity to cash out, making money for themselves but making the stock crash, leaving you, the consumer, sat with a bad investment that’s lost you money.

  Believing these kind of posts and videos are so dangerous because usually the influencer does not have enough knowledge to be promoting such a product. These products are normally a lot riskier than most people’s risk appetites, and the influencer is probably unaware of all the fine print. In all honesty, the only people that should be giving advice on financial services are licensed professionals, and even then, it is not a one-size-fits-all situation. A doctor wouldn’t go on YouTube and tell everyone to start taking antibiotics, regardless of whether they are sick or not. The same goes for a financial advisor. Any videos giving financial advice should be taken with a pinch of salt; not everyone’s finances are going to be planned the same way and not everyone is going to be investing in the same thing. Investing should be tailor made to the individual, based on goals, time frame, budget and risk appetite.

  Of course, I’m not saying that any social media influencer that posts this sort of stuff is a bad person (everyone needs to get paid), but be cautious when you watch people pushing investment strategies that they are probably not implementing themselves. If in doubt, always ask a professional.

How Will Inflation Affect Your Long-Term Planning?

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We’re all been hearing about how bad inflation is and that it’s increasing etc. But what does this actually mean and how does it have a lasting affect on our money planning?

What Is Inflation?

Simply put, inflation is when the cost of goods and living increases. Whilst some see this as a bad thing, slight inflation is good as it is a sign of a growing economy; meaning more employment, higher profits and an increase in production. But, right now, we are seeing a significant rise in inflation. In December of 2021, Singapore saw inflation hit a 9 year high of 4%.

How It Affects Us Now

This increase directly affects us, and you may have even felt a bit of a pinch. Food is a bit more expenses and energy prices seem to have gone through the roof. All of this means that your cold hard-earned cash has less spending power, essentially meaning that you cannot buy as many things with the same amount of money as you used to. What further exacerbates this problem is bank interest rates; most current accounts in Singapore have an annual interest rate of 0.05%, meaning the bank gives you that much extra each year (not a lot at all). If current inflation rate is at 4%, you are losing 3.95% of your money every year by just leaving it in your bank account! This means that whilst you are earning money, not only are things getting more expensive but you’re losing money in your bank account too!

How It Affects Our Future

As you can imagine, this situation has a massive knock-on effect for our futures. If inflation increases, or even plateaus at say about 2%, you are still losing money in your bank account. Food, housing, medicine and energy will continue to go up in price, meaning each year you will either be able to afford less, or have to spend more to keep up. Not only that, your savings will not be as powerful as it once was…so you can see how this is a problem two-fold!

How Can We Stop This?

But fear not! If we prepare now ahead of time, we can manage inflation so that it doesn’t eat away at our savings. There are a few things you can do in preparation: first, include inflation in any planning you do. Want to save up for a holiday in 5 years’ time? Inflate your ticket and hotel prices by at least 2% per annum (3% if you want to be safe). Secondly, consider using vehicles and instruments that will offer you higher returns than your current bank account- any % higher than current inflation rate will give you a positive yield, and will ensure that your savings don’t run dry. I also think it’s best to create multiple avenues for growing your money, so that if one option is not doing well, at least you have money in different areas that you can withdraw from. Lastly, do not underestimate how much different sectors will increase. Food, healthcare, housing etc. do not always follow the same trend or inflation rate. Ensure you have medical expenses covered and calculated into your long-term planning, as well as remembering that your income will not go as far in future unless you ensure there are increases.

Essentially, it is best to start planning now instead of panicking later on in life, realising that you could have prepared for inflation but didn’t. As always, it’s best to stay in-the-know, and consult a professional when it comes to your financial planning.

Hospital & Cancer Insurance; Updates YOU Need To Know About

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  There have been some new updates to Integrated Shield Plans (hospital insurance) in Singapore you need to know about. The MediShield Life Council reported that spending on cancer drugs has been increasing by 20% a year; a stark contrast to the 6% spending increase for other drugs. To curb these rising costs, MOH has come up with a Cancer Drug List.

The Cancer Drug List contains drugs that are effective and cost-efficient drugs and treatments that insurance companies will cover. If the drug is effective but not cost-effective, insurance will not cover it. Not only this, even if the drug is very cheap, but does not improve the cancer treatment, insurers won’t cover.

Those with Integrated Shield Plans, will not allowed to be covered for treatment not on the list, even if they are still on treatment. Although this sounds very daunting, MOH has stated that close to 90% of current cancer drugs and treatment in Singapore are on this list.

While this isn’t ideal, and of course may affect many people, it does mean that your insurance premiums won’t skyrocket up and up each year. Medical inflation is already very high in Singapore; this is one way the government are stepping in to stop it from going out of hand.

But what does this mean for insurance moving forward? I would strongly suggest adding a cancer coverage to your portfolio, to cover the shortfall of possibly having to pay for a drug not on the Cancer Drug List. Receiving a lump-sum payment can help pay for monthly cancer drug expenses, which can be approximately $2,300 a month.

How do you think this affects you in Singapore?

Why Did Crypto Crash?

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  It seems that we can’t catch a break this year, markets are down, there’s a war, inflation is up, and now the value of cryptocurrency has plummeted, leaving many feeling disheartened with their investments. But, why did it happen? It’s actually a much broader picture. Let’s do a deep dive…

Inflation

  The first thing that triggered the crash was investors losing confidence in cryptocurrency and fearing the rise in inflation; inflation has been rising the past few months and apparently has not reached it’s peak yet! This is somewhat due to customer demand after the pandemic, along with Russia invading the Ukraine.

Interest Rates

  The Federal Reserve raised its benchmark interest rate by 0.75%, which has been the biggest increase since 1994. This has had a massive impact on the crypto market. Interest rates make debt more expensive and negatively affect the economic climate; it can decrease the value of asset classes, particularly stocks and of course…cryptocurrency.

Stock Market

  As I previously mentioned, the hike in interest rates and inflation has massively affected the stock market; recently the S&P 500 decline has been even worse than at the height of the pandemic, as it dropped 5.8%. All these factors indicate a global recession is coming, and usually during bear periods, higher risk assets, including crypto, take a hit.

High Yields Were Promo Rates

  Many crypto platforms, such as Celcuis, offered returns of 18% and some platforms even more. These rates of returns are even higher than that of the stock market and could not be sustained year upon year for a long period of time- some were merely promo offers to get their platform some buzz and traction. Many people thought that this was a risk-free yield…definitely not the case! That 18% had to come from somewhere, essentially a borrower, and when more people want to gain these returns instead of borrow…that’s when problems arise.

Energy Crisis

  I’ve already mentioned the Russian-Ukraine crisis but the knock-on effects of the energy crisis have taken its toll on crypto too. If you’ve read my previous articles on cryptocurrency and the environment, you’ll know that mining crypto coins uses up a hell of a lot of energy. The cost of electricity has massively gone up since the Russian sanctions were put in place, meaning that it costs a lot to mine coins. This lowers the profit margins of the cryptocurrencies, depreciating their value.

In Summary

  To summarise, it was not just cryptocurrency that took a hit during this period; global markets are down, and many people are feeling the pinch. Rising living costs often leaves less disposable income for other things, including investment. But remember, historically bear markets (when the market is down) last on average for about 12 months, whereas a bull market on average lasts for 2.7 years…so the good times are mostly longer than the bad.

  One thing to remember is that cryptocurrency is unregulated and financial authorities cannot step in if anything goes wrong. This makes it a higher risk investment; remember that before you invest.