Dec 2, 2024: Our weekly Institutional Insights explores the latest market developments — market performance, industry news, exchange-traded fund (ETF) flows, trending topics, upcoming events and token unlocks — to help you supercharge your crypto trading.

 explores the latest market developments — market performance, industry news, exchange-traded fund (ETF) flows, trending topics, upcoming events and token unlocks — to help you supercharge your crypto trading.

Weekly Highlight — U.S. Economy Growth Driven by Improved Productivity

If U.S. economic growth is strong, why is the Federal Reserve considering interest rate cuts? This question was recently posed to Fed Chair Jerome Powell. Instead of focusing solely on the Fed's actions, we should explore the reasons behind the robust growth, and see how it can be sustained.

Real GDP is expected to exceed pre-pandemic levels for the second consecutive year. Typically, strong growth raises concerns about overheating, but inflation has actually fallen. Recent growth is largely due to increased productivity and a growing workforce, which are not inflationary and can help rebalance supply and demand.

A significant factor behind this success is the rise in labor productivity, averaging 2.3% over the past two years — faster than the four years before the pandemic. This uptick is linked to a surge in new business applications, especially in the tech sector, as the pandemic's economic shifts and relief measures lowered barriers to entrepreneurship, particularly benefiting underrepresented groups.

The boost in productivity also reflects workers moving to roles better suited to their skills, a trend accelerated by the 

. This mobility has been essential for productivity gains, as higher job turnover correlates with increased business dynamism.

However, sustaining higher productivity is a challenge. The Fed must avoid overly restricting the economy, as high interest rates can deter investment in technology. Additionally, a gradual cooling of the labor market, with declining job quits, is concerning.

For policymakers, monitoring labor market dynamics and business formation is crucial. If these indicators decline, productivity and growth could wane. The U.S. economy has made significant progress, and maintaining this momentum is essential.

Weekly Crypto Highlight — Sui Is Poised for Growth

Bybit has released the Sui ecosystem report, with its key takeaways below. (Read the full report 

: Sui has achieved impressive performance, processing over 297,000 transactions per second (TPS) while maintaining low latency. This positions it among the fastest blockchains available.

: In 2024, Sui's market capitalization skyrocketed over 1,000%, reaching $9.5 billion and reflecting strong investor confidence and growing adoption.

: The total value locked (TVL) in Sui’s DeFi ecosystem has surpassed $1.5 billion, ranking it 11th among major blockchain networks and highlighting its rapid growth in 

: The launch of the Grayscale Sui Trust has significantly increased institutional interest, resulting in an 89% price surge for the SUI token in Q3 2024, indicating its appeal to accredited investors.

: Sui is making strides in the gaming sector, introducing the SuiPlay0X1 handheld gaming device and various 

, enhancing user engagement and expanding its ecosystem.

Developed by Mysten Labs, Sui is a Layer 1 

 (PoS) blockchain launched on May 3, 2023. Its object-centric data model allows for parallel transaction processing, enhancing throughput and reducing latency. Its use of the Move programming language ensures resource safety through rigorous bytecode verification, mitigating common blockchain vulnerabilities.

: Partnerships with firms like Copper and Zero Hash strengthen Sui’s infrastructure and credibility in the financial sector, enhancing its offerings in digital asset custody and transaction facilitation.

: Sui’s DeFi sector is thriving, with leading protocols like 

 offering diverse financial services. In gaming, initiatives such as the SuiPlay0X1 device and various web3 projects bolster user engagement.

In summary, Sui is poised for continued growth, driven by technological innovations that are expanding its presence in both DeFi and gaming.

Advanced

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Weekly Institutional Insights: Sui Poised for Growth; U.S. Economy Driven by Productivity Growth

Chill Guy is a viral meme illustration that took social media by storm before a crypto project used the meme to launch a Solana-based token. Learn more here.

What started as a simple illustration of a laid-back dog has become a global meme sensation, with the cartoon character known as Chill Guy dominating both social media trends and cryptocurrency markets. Created by artist Phillip Banks in October 2023, the easygoing canine character sparked a viral movement that has attracted major brands worldwide.

This article follows Chill Guy’s transformation from a social media sensation to a cryptocurrency asset. We'll examine its viral beginnings, community growth, market impact and what potential investors can expect from CHILLGUY in the future.

 is a viral meme illustration by artist Phillip Banks, depicting a laid-back dog in casual clothes whose easygoing attitude took social media by storm before a crypto project used the meme to launch Just a Chill Guy as a Solana-based token.

What Does Just a Chill Guy Aim to Achieve?

The CHILLGUY meme coin aims to spread a "Why worry?" philosophy into cryptocurrency markets by embracing the laid-back, stress-free attitude that made the original meme go viral. The project transforms this easygoing vibe into a community-driven token, where being low-key isn't just a catchphrase — it's a shared mindset among holders.

The CHILLGUY community brings this philosophy to life by sharing endless variations of the CHILLGUY meme across social platforms. Through market swings and viral trends, CHILLGUY keeps his iconic pose: hands in pockets, subtle smirk, perpetually relaxed.

Just a Chill Guy (CHILLGUY) operates as a Solana Program Library (SPL) token on the 

 blockchain, leveraging the network's ultrafast speeds and low costs to ensure smooth trading. The token was created using Pump.fun, a specialized platform that lets users launch Solana-based tokens without any fees, removing traditional barriers to token creation.

CHILLGUY is a community takeover (CTO), meaning it's completely owned and directed by its token holders with no central team in control. This decentralized structure ensures the project stays true to its community-driven nature, its holders collectively guiding its future while embodying the laid-back spirit of the original meme.

The CHILLGUY token launched with a maximum supply of 1 billion tokens, of which 999,965,435 are currently in circulation. This near-complete distribution of tokens to the market supports active trading and community participation.

What makes CHILLGUY's tokenomics particularly notable is its widespread distribution across more than 142,000 unique holders (as of Nov 27, 2024), achieved in just 12 days. This rapid expansion of its holder base demonstrates strong community adoption and aligns with the project's decentralized, community-driven principles.

CHILLGUY has exploded across social media, especially on TikTok, where the meme has amassed hundreds of millions of views. Its laid-back character resonates with users worldwide, inspiring countless creative adaptations.

Major brands worldwide have embraced CHILLGUY in their marketing campaigns. From Sprite Europe to NFL on CBS, the character has resonated across mainstream media, even catching the attention of global figures like El Salvador's president Nayib Bukele.

The “Chill Guy” meme’s influence spans multiple social media platforms, with a growing community of followers: 96.6K on X (

). On the other hand, the meme token itself also has a vast community, with 39.9K on X (

) and an active Telegram channel of over 15,000 members. These numbers reflect the meme's ability to engage audiences across different platforms.

The token's popularity in cryptocurrency markets matches its social media success, with CHILLGUY maintaining a substantial 24-hour trading volume of over $330.03M as of Nov 27, 2024. This high trading activity demonstrates the strong market interest in CHILLGUY beyond its meme status.

Looking to trade Just a Chill Guy tokens? Bybit now offers the CHILLGUY/USDT Spot trading pair and CHILLGUYUSDT Perpetual contract. To get started, you’ll first need to create a Bybit account, then fund it with cryptocurrency and navigate to the 

While CHILLGUY has maintained strong trading volumes and continues gaining mainstream attention through its viral social media presence, investors should carefully weigh its strengths and risk factors before making investment decisions.

With its widespread brand adoption, sustained trading activity and explosive community growth of over 142,000 holders, CHILLGUY demonstrates significant market potential. However, meme coins are inherently volatile. Potential investors should 

 and invest no more than they can afford to lose.

CHILLGUY is the latest viral sensation to harness the power of the attention economy to convert social media momentum into crypto market success. While CHILLGUY has already demonstrated its ability to capture mass appeal, its position as a leading meme token will depend upon how effectively it maintains its cultural relevance and community engagement in this fast-moving market.

Intermediate

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Just a Chill Guy (CHILLGUY): Embracing the Art of Nonchalance

Zircuit (ZRC) combines optimistic and ZK rollups with AI-driven security, offering fast, low-cost Ethereum Layer 2 solutions. 

 network has flourished, mainly due to the ongoing network congestion, high fees and poor scalability of the latter. Many of these platforms use rollup technology, whereby batches of multiple transactions processed off-chain are bundled together and posted in bulk to the underlying Layer 1. Ethereum-linked rollups mainly come in two varieties 

 (ZK). While optimistic rollups boast lower computational overhead, the ZK variety of these networks features a higher degree of security.

Zircuit (ZRC) is a Layer 2 chain that adopts a hybrid approach, combining the elements of optimistic and 

. This lets the platform offer the performance benefits of optimistic technology along with the security of ZK validity proofs. To further enhance overall security, Zircuit uses a unique 

 (AI)–driven system of monitoring for malicious transactions.

 (ZRC) is a hybrid Layer 2 blockchain that combines the features of optimistic and ZK rollups, and uses AI-driven monitoring for potentially harmful transactions. 

 rollup development technology, a popular framework for building optimistic rollup networks. Additionally, it uses zero-knowledge proofs, which lets the platform offer the best of both worlds 

 the performance benefits of optimistic rollups and the security of ZK technology. Zircuit is 

The Zircuit project takes security very seriously, and has introduced a unique system of AI-based protection against malicious transactions at the sequencer node level. The use of ZK proofs and an AI-based protection system make Zircuit one of the most secure platforms in the competitive world of Ethereum Layer 2 chains.

Along with its excellent security benefits, Zircuit also boasts low costs, fast transactions, excellent scalability and 2-second block production intervals. All these features make it an ideal environment for 

 (DApps) in various niches, particularly 

 (DeFi). In fact, the leading protocols within the Zircuit ecosystem are all dedicated to the finance niche, with Zircuit Staking being the largest application by TVL.

With its heavy focus on DeFi, Zircuit aims to become a leading liquidity hub for various token types within the sector, including 

. These assets can be staked through the Zircuit staking program — supported by the platform's Liquidity Hub — to earn staking APRs, airdrop rewards and points based on the Zircuit Point program (covered further in our article).

The platform also operates a secure native bridging solution, 

, to help users transfer assets between its Layer 2 network and Ethereum Layer 1.

The company behind the project, Zircuit Ltd., was founded in 2021 in Canada by Dr. Martin Derka, Jan Gorzny and Angel Xu. Zircuit's testnet was launched in November 2023, but made headlines in April 2024 when the project reported that its 

 (TVL) had soared past $2 billion. While testnet TVLs are more a gauge of future potential for a blockchain than an indicator of its existing worth, the news attracted the attention of industry observers toward the platform. Following its highly publicized testnet success, Zircuit launched the first phase of its mainnet in August 2024. This was followed by the launch of the platform's native token, ZRC, in November 2024.

As a typical rollup, Zircuit uses an off-chain sequencer node to batch and organize Layer 2 transactions for subsequent posting to the underlying Ethereum Layer 1. The batches have ZK validity proofs attached to them to signal to Layer 1 validators that they’re free from fraudulent transactions. Zircuit's architecture also includes prover nodes, whose job is to produce these validity proofs.

However, unlike other rollups using ZK proofs (also known as validity proofs), Zircuit doesn't generate validity proofs for every block of transactions. Instead, some blocks have pre-generated template proofs, while others go through the process of having a dedicated validity proof created for them. After a few blocks featuring validity proofs, there are several more that utilize template proofs. The image below illustrates this approach.

The key reason Zircuit has adopted this form of proof design is that the process of generating ZK proofs is computationally intensive. By using template proofs for some of the blocks in a sequence, Zircuit can reduce the overall computational overhead. However, the project’s team has stated that the template proof model is temporary, and will be phased out in the future. At that stage, the platform will move to generating ZK proofs for each block.

Zircuit features a highly modular design whereby provers — responsible for generating validity proofs on the platform — can easily be plugged into or removed from the network. This modular approach is distinct from the standard ZK rollup design, in which provers are more tightly and less flexibly integrated into the overall architecture.

As noted earlier, Zircuit uses a dedicated sequencer to organize and batch transactions into blocks. The platform also applies AI-driven monitoring at the sequencer level (the Sequencer Level Security, or SLS) to spot and exclude fraudulent transactions before they’re finalized on Layer 2.

When transactions are first posted to Zircuit, they enter the 

 — a temporary area from which the sequencer picks and organizes individual transactions into blocks. The mempool is being monitored at all times, using AI algorithms to identify suspicious transactions. If a transaction in the mempool raises a flag, it's quarantined and assessed for validity before the sequencer can include it in a block. The image below shows how this process works.

One of the distinct features of Zircuit is its hybrid architecture, which combines the properties of optimistic and ZK rollups. At the base level, Zircuit is built using Optimism's Bedrock development framework, a technology popular for optimistic rollup networks. However, the use of ZK proofs — or, to be more precise, a combination of validity proofs and template proofs — ensures that Zircuit enjoys a security level that standard optimistic rollups normally can't match.

The use of AI-based SLS provides robust security to Zircuit, complementing the already highly secure ZK proof system. Very few Layer 2 networks in the industry currently feature anything similar, making the platform a true pioneer of AI use for sequencer-level operations.

Like any rollup based on Optimism Bedrock, Zircuit enjoys EVM compatibility. This allows for smooth interoperability with the underlying Ethereum Layer 1. EVM compatibility also makes it easy for developers familiar with Ethereum’s environment to develop Zircuit-based DApps, or to port existing Ethereum applications to the platform. Developers can take advantage of technologies commonly used for Ethereum (e.g., the Solidity programming language and the Hardhat development framework) to build Zircuit applications and smart contracts.

Zircuit Bridge is a native bridging solution designed to easily transfer tokens between Ethereum and Zircuit. It boasts high security, low transaction fees and fast transfers, and allows users to move a variety of cryptocurrencies between Ethereum and Zircuit, including ETH, 

) and LRTs like Super Symbiotic LRT (weETHs). As of late November 2024, the total number of cryptos supported by the bridge is close to 30.

Zircuit has launched a reward program called Zircuit Points. Users can earn these Points by staking supported assets, and by participating in the Build to Earn initiative (more on this below). Accumulated points will be converted to ZRC tokens in the future. Points also create the opportunity to qualify for token airdrops.

The primary way for most users to earn Zircuit points is via 

. The Zircuit Staking program lets you stake LSTs, LRTs, popular stablecoins, some wrapped tokens and Ether (ETH) to earn points. Using LSTs and LRTs, you can earn yields (along with native Zircuit staking APRs and Points) from the respective staking and restaking platforms that issue these assets.

Zircuit Points earned via staking have different multipliers, depending upon the asset. For example, Ether has a multiplier of 0.5, while LSTs, LRTs and stablecoins have a multiplier of 1. Multipliers for different LST and LRT assets may be subject to change in the future.

Build to Earn is another way to qualify for Zircuit Points. The program allows developers to contribute to the Zircuit ecosystem and earn Points in a number of ways, including:

Launched in November 2024, ZRC is the platform's native cryptocurrency. It's an 

 asset deployed on both Zircuit and Ethereum Layer 1. ZRC is mainly used for reward distributions, and participation in token airdrops for ecosystem DApps. Currently, transaction fees on the network are paid in Ether. It's possible that, in the future, ZRC might be used for some transaction fee payments.

ZRC is also used for rewards under the Gas Rebate program. As users conduct transactions on the platform, they 

. Zircuit’s Gas Rebate program provides rebates to offset some of the incurred fees. The amount of ZRC earned as a rebate is proportional to the amount spent on gas in ETH; the project's documentation states that for each ETH spent on gas, the user earns 125% in ZRC. All kinds of gas fee payments qualify for the rebate, including ordinary asset transfers and transactions involving interaction with Zircuit DApps.

ZRC is a supply-capped token, with a maximum and total supply of 10 billion. The token's supply allocation shares are as follows:

The ZRC token is available on Bybit's Spot market as a swap pair with USDT (

 to grab a share of the 5 million ZRC prize pool. New users who sign up for a Bybit account and complete identity verification can earn ZRC rewards by accumulating a deposit volume of at least 2,000 ZRC, or by depositing 100 USDT and trading 100 USDT worth of ZRC via their first trade with Bybit. 

Meanwhile, existing users can qualify for ZRC rewards by trading at least 500 USDT worth of ZRC on the Bybit Spot market, with the possibility of earning up to 10,000 ZRC based on trading volume. The 

 event will run through Dec 10, 2024, 8:59AM UTC.

Zircuit is among the pioneering Layer 2 platforms to adopt a hybrid design for a rollup network. Thanks to the platform's architecture, users can take advantage of low transaction costs, fast transfers and great scalability while enjoying the benefits of high security delivered by ZK proofs and AI-driven mempool monitoring. AI-based monitoring for fraudulent transactions is a particularly notable feature of the platform and is undoubtedly among the most advanced technologies employed in the blockchain industry.

User security combined with faster and cheaper transactions for the Ethereum network — all in one package — is now feasible, thanks to Zircuit's innovative technology and unique approach!

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What Is Zircuit (ZRC): Where Performance Meets Cutting-Edge Security

Bybit is celebrating its sixth anniversary with the #Super6Bybit event, offering a $1.2 million prize pool and focusing on its bbSOL token.

Daily Top Performer — Virtuals Protocol (VIRTUAL)

On Wednesday, the S&P 500 fell 0.38% as tech stocks dropped and inflation data reinforced a hawkish Fed outlook. Coindesk Indices, an index measuring broader cryptocurrency market performance was down by 0.40%, with Bitcoin and Ether dropping by 1.86% and 1.79%, respectively in the past 24 hours.

Today's top performer is VIRTUAL, which surged 53.6% following the launch of the $MUSIC token by Agentstarter, featuring AI-driven music video capabilities and community-focused tokenomics.

Virtuals Protocol (VIRTUAL), founded in 2021, allows users to invest in and co-own AI-driven virtual assets like companions and influencers. Its model fosters community ownership, transforming AI agents into revenue-generating assets across platforms like Roblox and TikTok. The platform attracts contributors from AI and gaming to drive innovation in virtual economies. 

, using AI to create music videos and offering features like animated videos, voice mimicry, and karaoke tracks. The tokenomics allocate 60% for airdrops, 20% for liquidity, and 10% each for the development team and Virtuals Protocol.

Check Out the Latest Prices, Charts, and Data of 

Bybit is celebrating its sixth anniversary with the 

, offering a $1.2 million prize pool and focusing on its bbSOL token. Launched in September 2024, bbSOL is the first exchange-backed Liquid Staking Token on Solana, providing liquidity and staking rewards. The campaign, running from November 28, 2024, to January 6, 2025, invites participants to build, transform, and supercharge their bbSOL through tasks, leaderboards, and community milestones, increasing rewards. The event combines gaming mechanics, community engagement, and opportunities to win prizes while promoting innovation and growth in the crypto space.

Yesterday, there were no flows in BTC Spot ETFs, including GBTC and non-GBTC categories.

. Stake BNB on Lista's portal to get slisBNB, then deposit it into Astherus to earn airdrop points with multipliers (3X for Lista, 1.15X for Astherus). No lockup is required, and slisBNB is the most efficient option.

Beginner

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Bybit Celebrates 6th Anniversary with $1.2M Prize Pool and bbSOL Supercharging Campaign

Investing

Trading

Fearful of rising asset prices and defaulting bonds? Learn from the 2008 financial crisis so you can invest smartly for the road ahead.

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A recent liquidity crisis at the second-largest property developer in China has investors drawing parallels to the infamous 2008 financial crisis. This issues has raised investors’ concerns; that its effects may trickle down to the global economy. Evergrande, the infamous company, has fueled an economic spur in the country since 1996, but most of the growth sat atop unsustainable and ever-increasing debt. Today, the company has liabilities of

, the largest debt of any business worldwide. Moreover, its real estate properties have low occupancy rates, which is reminiscent of the 2008 financial crisis.

The Chinese government says they’ve got things under control. At the same time, strategists recommend that Beijing acts promptly because Evergrande’s decline is hurting market sentiment, even spreading to crypto by causing Bitcoin

In this guide, we discuss what caused the 2008 financial crisis and how savvy crypto investors can learn from the economic uncertainty in the market.

The 2008 financial crisis was mainly caused by the collapse of the U.S. housing bubble. Deregulation in the finance industry allowed banks to trade hedge funds with derivatives and bundle subprime mortgages, ultimately causing real estate assets’ values to plunge.

The roots of the Great Recession began to form in 2007. At that time, it was clear that the long-practiced binging on cheap credit would have imminent consequences. Preliminary events had already begun to expose cracks in the system, such as the collapse of two Bear Stearns hedge funds.

 in Britain was also going to ask the Bank of England for emergency funding. At the same time, BNP Paribas shocked investors by freezing $2.2 billion of funds under management.

However, these signs failed to prepare investors for what was to hit the next year. 2008 brought the worst financial crisis in about eighty years, engulfing the whole world.

The 2008 financial crisis cost ordinary people their life savings, homes and jobs — and sometimes all three. Today, many people wonder what caused the 2008 financial crisis. Realistically, there was more than one culprit, but if there’s a place to start, it’s mortgage-backed securities.

What Is a Mortgage and What Are Mortgage-Backed Securities?

A mortgage is a legal agreement between you and a lender that permits the lender to seize your property if you can’t repay the loan you’ve taken to buy it, along with any applicable interest. If you miss payments, the lender can take your home in a process called foreclosure.

 (MBS) are bonds secured by real estate and home loans. The pooling of several similar loans creates mortgage-backed securities. Essentially, investors can benefit from these securities without ever buying or selling a property. An investor putting their money in MBS is essentially obtaining the right to the value of this mortgage pool.

An investor buys an MBS because monthly payments from the borrowers go to that investor, rather than to the original lenders. If the borrowers are unable to pay, the investor may lose money.

Mortgage-backed securities exist because they let the bank sell its mortgages, which frees up more funds for the bank to lend to other borrowers. Additionally, it allows non-banking institutions to invest in the mortgage business.

How Did Mortgage-Backed Securities Lead to a Rise in Housing Prices?

Before mortgage-backed securities, only banks could offer long-term loans to borrowers, since they had enough money to wait for the loans to be repaid in 10 to 30 years.

With MBS, lenders were able to retrieve their cash instantly from the investors. As a result, the number of lenders rose. In fact, some started offering unrealistically low interest rates — in some cases not even bothering to verify the borrowers’ assets or salaries.

The lax lending policies meant banks were now facing tough competition. Therefore, they also had to make their qualification standards more flexible and lenient. And to make matters worse, mortgage-backed securities weren’t regulated.The U.S. federal government’s regulations only applied to banks, as they were required to ensure the protection of their depositors. Nevertheless, the lax lending standards meant more people were buying homes, resulting in a real estate boom.

Since lenders weren’t consistently confirming whether the borrowers could repay loans, many people ended up with unaffordable mortgages. As a result, subprime mortgages started piling up.

 is given to a high-risk borrower with a low credit rating. The interest rate on this type of mortgage is much higher than a standard rate in order to compensate for the higher risk.

Subprime mortgages are sometimes also adjustable-rate, which means the lender can increase the interest rate at any point in time.

The Role of Subprime Mortgages in the 2008 Financial Crisis

Subprime mortgages were a primary reason for the 2008 financial crisis, since many borrowers were issued these loans without any proof of income or down payment.

A borrower could come along and state their income to be $200,000 without any documentation to prove their claim, and they could still apply for a mortgage.

, (“no income, no job, and no assets”). Things began to go seriously wrong when lenders and the rest of the financial services industry began putting subprime loans in the same bundles as conventional mortgages issued to people with high credit scores.

” of collateralized mortgage obligations. These obligations have multiple security pools, with each pool having different priorities and maturities. Bear in mind that the loan repayments for the first three years of any subprime mortgage have a low interest rate. Thus, the banks pooled these payments with the low-interest payments of regular mortgages.

Then, they sold these bundles to investors.

The drop in housing prices in 2006 had already started creating problems. Unfortunately, the decline came during the third-, fourth- and fifth-year mortgage repayments, when many borrowers started to struggle with the sudden spike in interest rates.

A drop in the price of homes meant that the value of borrowers’ properties was less than their mortgage balance. Therefore, they couldn’t sell their homes. On the other hand, investors in mortgage-backed securities realized that borrowers were starting to default, pushing them into foreclosure, so investors tried to get insurance.

At this point, American Investment Group (AIG), the issuer of this insurance, nearly declared bankruptcy, partially contributing to the notorious 2008 financial crisis.

What Was the Chain of Events that Led to the 2008 Financial Crisis?

To fully understand what caused the 2008 financial crisis, it’s essential to look chronologically at the events leading up to it.

Home Buyers Take up Loose Credit Lines to Finance Mortgages

The Federal Reserve wanted to boost the economy and make more money available for consumers and businesses. As they say, the road to Hell is paved with good intentions.

Due to low lending rates, even people with poor credit scores could get mortgages to buy homes. Therefore, they took loose credit lines and financed mortgages. On the flip side, lenders failed to put stringent qualifying requirements in place because they were selling the loans in bundles to investors.

In keeping up with the competition, banks also dropped their standards, offering lowered interest rates. The Federal Reserve did raise the rates later, but it didn’t do much to alleviate the situation.

As a result, homeownership spiked to saturation.

Subprime mortgages, as discussed earlier, have high interest rates. Borrowers who were already subprime struggled to repay their loans in the third through fifth years of the repayment period.

Boom in Supply of Houses Causes Home Prices to Plunge

Problems had already started surfacing way before 2008. In 2004, homeownership in the U.S. had risen to

However, prices of homes started falling in 2006. Americans suffered widespread hardships during this time as their homes had less worth than the amount they’d paid for them. Because of this, there was no way for them to sell their homes.

Subprime Lenders and Financial Institutions Declare Bankruptcy

By 2007, subprime lenders started declaring bankruptcy. Twenty-five lenders had gone under by March of that year.

 filed for bankruptcy in April and laid off 50% of its workers. Soon after, BNP Paribas, the largest bank in France, also announced a loss worth billions of dollars, while American Home Mortgage Investment also declared bankruptcy.

Investors Lose Their Money from Financial Instruments: CDOs, CDSs and Mortgage-Backed Securities

As borrowers defaulted on their payments, investors began losing money from financial instruments, such as MBS. Likewise, investors also sustained losses from collateralized debt obligations.

Lehman Brothers Holdings suffered the most significant blow during the 2008 financial crisis: it owed $600 billion, of which credit default swaps covered $400 billion. In credit default swaps, buyers shift the financial risk to an insurance company and make periodic payments in exchange.

Think of it as an insurance policy, except it’s for buyers who predict that they may wind up in a financial pickle that could affect their investments in the future.

Credit default swaps became popular soon after their invention. By 2007, they were valued at

. However, the global financial crisis hit CDSs hard, dropping the value to

 in just two years following the Great Recession.

Lehman Brothers faced a substantial burden as their insurer, AIG, didn’t have sufficient funds to clear Lehman Brothers’ debt. Therefore, the Federal Reserve had to step in to bail out Lehman Brothers.

Huge Banks Declare Bankruptcy, Causing Liquidation of Assets and the Stock Market Plunge

The world became aware of the initiation of a global financial crisis when major banks started declaring bankruptcy. As a result, the stock market plunged.

 that failed during the financial crisis of 2008:

The most notable bank to collapse during the global financial crisis of 2008 was Bear Stearns, an investment bank in New York City. Ultimately, JPMorgan Chase & Co. bought Bear Stearns for just

Federal Reserve Steps in to Make Emergency Loans to Banks and Salvage the Economy

The primary reason many other financial giants in the country didn’t fail was that the Federal Reserve intervened, pumping taxpayers’ money into the economy. Here are a few steps the government took:

 was introduced to mollify the financial crisis in the country. U.S. President George W. Bush signed TARP in 2008, allowing the Department of the Treasury to put money into the market by purchasing equity and assets.

TARP was designed to give consumers debt relief and stabilize the overall economy. Initially, TARP was authorized to inject

 into the failing market. However, the amount was later lowered to $475 billion after the signing of the Dodd-Frank Act.

Dodd–Frank Wall Street Reform and Consumer Protection Act

President Obama signed the Dodd-Frank Act

 to tackle the aftereffects of the financial crisis of 2008. The law put in place regulations to prevent the predatory behavior of lenders and mortgage companies. Here are some of its other

, also known as the bank bailout, was passed in 2008. Per this law, the $700 billion 

 was created to buy toxic assets from banks.

The lowered interest rates before the financial crisis were the only silver lining from the whole ordeal. Americans suffered heavily as a result of the crisis, with

Also, as the housing market plummeted, Americans lost a whopping

, vaporizing many of their retirement accounts. On a global scale, there was a drop of 4% in economic growth.

Overall, millions of Americans lost their jobs due to layoffs by bankrupt companies. Meanwhile, after defaulting on payments, subprime borrowers lost their homes.

What Can Crypto Investors Learn From the 2008 Financial Crisis?

The financial crisis of 2008 certainly put a lot of Americans through financial ordeals, but it also offered lessons and identified loopholes in economic policies. Here are some things crypto investors can learn from it.

As a crypto investor, be wary of crashes and 

. We live in a world of meme coins and influential figures swaying the crypto market with their tweets. Therefore, you should have a non-sensationalist approach to crypto investing, especially when it comes to coins that seem to have rallied too quickly.

Currently, there are thousands of cryptocurrencies, although not all of them are widely known since they may not have made it to price monitoring sites. Some of these currencies are in the process of seeking their niche in a saturated marketplace.

However, others are just on the hunt for unsuspecting investors — whom they can prey on to make a quick buck. Thus, 

Start by looking at the crypto business model. You can read the company’s white paper and judge whether there’s a scope for scalability or if the company is on its way toward expansion and development in the future.

Next, look at the team. Do a Google image search and check to see if the people mentioned even exist, or if their pictures have been taken from another website. Some developers even put fabricated team members on their white paper to make the project seem legit.

Finally, look at the company’s initial coin offering, transparency, partnerships and profits.

The blind trust of investors in credit rating agencies was one of the catalysts of the financial crisis of 2008. 

. Do your own research, rather than blindly following an online article written by someone who may simply be trying to sensationalize the content as clickbait.

What Caused the 2008 Financial Crisis: Crypto Investor Takeaways

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