Amazon, one of the biggest companies on the planet and also one of the best known, created an empire in just a few years. However, it has now just lost over $1 trillion in market value, making it the biggest loss in history. In addition, the company has already suffered from exponential losses this year. Last month, Bloomberg reported on Amazon’s earlier loss of $1 billion in market value. Since that launch, the company has rebounded and depreciated below last month’s numbers.
Current market capitalization is $868.68 billion. However, it did not stop there, this time the company suffered a drop of 1 trillion in market value, where some main factors contributed to this situation. Therefore, the reason for this collapse was a combination of factors in the macroeconomic scenario. Like rising inflation and tightening monetary policy with rising interest rates in the country to control prices.
What’s more, with the tighter economic environment and fears of a recession on the radar, America’s top five technology companies have already lost $4 trillion in market value for the year. This group includes Netflix, Objective, Amazon, Microsoft, Apple and Alphabet (Google).
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Jeff Bezos Net Worth
In addition, the fortune of Jeff Bezos, the fourth richest person in the world and founder of Amazon, also fell to US$ 113 billion. A drop of 41.2% compared to the US$ 192.5 billion estimated by him at the beginning of the year. The general issue is that moments like this, when the market has been suffering declines, it is common for a large market value to be reduced. Ultimately, after those pandemic years that were so beneficial for Amazon, consumers’ post-pandemic habits have had an adverse effect. A slowdown in sales has sent the stock down 50% in the past two months.
comments on twitter
This case brought a repercussion on Twitter where many users are joking about the fact that many claim that the stock market is safer than the cryptocurrency market. However, this issue is complex to discuss, as cryptocurrencies have lost heavily along with every other market. A widely spoken phrase, which draws attention, is that “cryptocurrency investors are the only ones who see their assets falling by more than 80% and do not worry about bankruptcy, because they believe in the return”. On the other hand, investors in the traditional market continue to say that this is a normal decline for a company of such size and in the consumer market.
Crypto Market vs Stock Market
The two markets, both cryptocurrencies and stocks, had a somewhat complicated 2022. One of the protagonists for this defeat in 2022 was the monetary tightening of the Federal Reserve (Fed), the US central bank. Therefore, high interest rates are one of the “weapons” against inflation that unfortunately also bring down the prices of both cryptocurrencies and the traditional stock market. Another factor that influenced the market down this year was the war between Ukraine and Russia when Russian President Vladimir Putin authorized the invasion of Ukraine, so Bitcoin, which was hovering around $36,000, started to plummet to less than $33,000 in the following day. In addition, stocks suffered negative impacts globally. Finally, another unfavorable component became more evident: the correlation between Bitcoin and the stock market, especially with struggling stocks of large public tech companies. As such, BTC dropped below $28,700 around this time, following the S&P 500, which then officially entered a bear market. In early June, the ratio reaches 100%.
Highest inflation in 40 years
June 2022 will also be remembered for the crash that hit the US cryptocurrency market. After the disclosure of the accumulated inflation in the 12 months, when the Buyer Price Index (CPI) reached 8.6%, the highest percentage since 1981.