It’s getting ugly out there.

Bitcoin is down over 8% this week and has fallen nearly 50% from last year’s all-time-high. The situation isn’t much better for Ethereum, down 5% over the week, while newer best-of-breed coins like Solana (SOL), Terra (LUNA), and Avalanche (AVAX) fell over 10% this week. Things haven’t looked this bad in a while, and it’s going to get worse before it gets better.

But don’t be alarmed. Like the meme of the dog in a bowler hat sitting in a house on fire: This is fine.

Before getting into why things will be (mostly) fine, let’s take a look at what’s causing crypto to melt down in the first place.

The primary culprit is the global macroeconomy. Governments around the world are being walloped by inflation levels not seen in 40 years, and central banks are finally taking measures—like jacking interest rates and shrinking their balance sheets—to fix this. Unfortunately, this has meant taking away the cheap money punchbowl that has powered decades of surging stock and real estate prices.

The result has been a wipeout in both stocks and crypto (Bitcoin is more closely correlated with the Nasdaq than it’s been in ages) and fear among investors. Meanwhile, other global events—from the war in Ukraine to new Covid lockdowns in China—are fueling further sell-offs and adding to the sense of unease. In these circumstances, is it any surprise people are flushing their Shiba Inu tokens? Many crypto enthusiasts, and Bitcoiners in particular, like to believe blockchains will supply an alternative financial reality when the world goes to hell, but it’s…