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  • Chris Bratton - Tech Journalist

Crypto space is still unstable: What have we learned so far?

Over the last two weeks, the cryptocurrency market has been in freefall. Fear and panic gripped the market like Bitcoin, the world's first digital currency, plummeted below $30,000 twice a week, reaching its lowest level in 16 months. Other major cryptocurrencies fell, with losses ranging from 30% to 90%.



Here's a look at what caused the crash, if now is a good time to buy, and what investors can expect from the markets in the future. Bitcoin briefly dipped below $30,000 for the first time in 10 months on Tuesday, while cryptocurrencies have lost nearly $800 billion in market value in the past month, according to data site CoinMarketCap. Investors are concerned about tightening monetary policy, which has led to a decline in cryptocurrency prices.


According to CoinGecko, in November, the most popular cryptocurrency, bitcoin, reached an all-time high of over $68,000, boosting the market worth of cryptocurrencies above $3 trillion. On May 10, the figure was $1.51 trillion, a massive crash in the market.


There was also a setback for the Terra Protocol and its ecosystem, which were supposed to keep the crypto market stable. The protocol's algorithmic stable coin, UST, lost its peg and fell to around $0.001. Binance, one of the largest cryptocurrency exchanges, delisted the UST-linked $LUNA token during the Terra Luna crash. The cryptocurrency dropped by more than 99 per cent. According to coin gate, Terra Announces New Emergency Response Initiatives to Assist LUNA And its stable coin UST. Binance and many popular exchanges removed trading pairs for UST and LUNA, which caused a huge panic among the traders.

Changpeng Zhao, CEO of Binance, has tweeted about the downfall of the stable coin TerraUSD (UST) and its linked token Luna (LUNA).


"I am very disappointed with how the Terra team handled this UST/LUNA incident (or not handled). We requested their team to restore the network, burn the extra minted LUNA, and recover the UST peg. So far, we have not gotten any positive response or much response at all," he tweeted.


The Federal Reserve's rate increase and the war in Ukraine's impact on oil prices have impacted market mood, which has moved to cryptocurrencies. Cryptocurrencies were marketed as an asset class distinct from the financial markets, unaffected by market volatility. However, the last two weeks have demonstrated that cryptocurrencies are not immune to larger market sentiment. Last week, an estimated $200 billion in investor value was wiped out.


The CEO and Co-Founder of Vauld, Darshan Bathija, told Financial Express Online, "Due to a broad sell-off, BTC prices dropped below the $30,000 level for the first time since July 2021, while ETH prices stood at $2319. The Crypto Fear And Greed index was in the "Extreme Fear" zone, a sign that investors were too worried and were selling their holdings to minimise losses".


Experts say that Bitcoin and other cryptocurrency prices are collapsing due to a widespread sell-off caused by investors' excessive panic. Even institutional investors appear to be dumping their crypto assets in large quantities, causing the steep price decline.

Several reports may make crypto investors confident In these difficult times.


Emirates Airlines stated that it intends to include bitcoin as a payment option. The airline plans to recruit personnel to develop client-needs monitoring applications.


From BBC News, famous brand Gucci stores accept cryptocurrencies in the US. Customers will be able to make payments with Bitcoin, Ethereum, and Litecoin. Later this month, the service will be introduced at some of its marquee locations, including Rodeo Drive in Los Angeles and Wooster Street in New York. The company announced that it would also accept Shiba Inu and Dogecoin, a so-called "meme" cryptocurrency founded as a joke.


There must be ups and downs in the trading market; that's normal. Although not so terrible, it has happened many times before. There are many reasons why the market can dump. But over time, that is likely to change. So investors should be patient at the right time.

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