Cryptocurrency instability No Al Bitcoin Shirt
News about the cryptocurrency market in the past week.
Terra Luna’s collapse and recent sell-offs suggest that this type of business remains risky and highly experimental. Last week, the cryptocurrency market was constantly fluctuating. Bitcoin price once fell to nearly $25,400, the lowest since the end of 2020. Cryptocurrency instability No Al Bitcoin Shirt Luna and stable coin UST – two tokens that have always been in the group of the world’s strongest cryptocurrencies for a long time – plunged, causing players to lose money.
The cryptocurrency market in general also became gloomy when more than 300 billion USD was wiped out in just a few days. “The crypto world is falling into a full-blown crisis. The fragility is shown in the fact that digital currencies are all in the process of testing and unregulated,” the New York Times commented. The cryptocurrency market is going down so fast that influencers can’t do anything about it. Artists like Kim Kardashian or tech moguls like Elon Musk have posted positive messages about cryptocurrencies, but things are not getting better.
According to some experts, the past period has been scarier than 2018’s “crypto winter”, which has far-reaching effects because the number of people and organizations holding crypto has been more crowded than it was four years ago. . Observers even compare it to the beginning of the 2008 financial crisis. “This is like a hurricane,” said analyst Dan Dolev, who is in charge of crypto companies and tech finance at Mizuho Group. During the pandemic, more people are learning and participating in the cryptocurrency market.
According to Pew Research Center data earlier this year, 16% of Americans own cryptocurrencies, up from 1% in 2015. Major banks like Northern Trust and Bank of America also joined the ranks of crypto-backed companies. number. The rapid decline in the past week has had serious consequences, sweeping away the assets of many people. Since the beginning of the year, the Bitcoin price has dropped by as much as 40%. How long the cryptocurrency slump can last is unclear. “It’s difficult to predict.
It will take a lot more time to analyze if the market stays the way it is,” commented Charles Cascarilla, founder of blockchain company Paxos. Uncertainty of Cryptocurrencies Cryptocurrencies hit a peak in November 2021, touching nearly $70,000 per coin. But since then, its price has dropped by more than 50%.
Things took a turn for the worse last week, though, when TerraUSD collapsed. Stablecoins are digital currencies that are developed on the blockchain and have a stable value by “imitating” the value of fiat currencies such as the USD or the Euro. Many traders use them to buy other cryptocurrencies. TerraUSD has the backing of well-known and trusted venture capital firms, such as Arrington Capital and Lightspeed Venture Partners.
But according to Kathleen Breitman, co-founder of blockchain company Tezos, that gives a “false sense of security” for those who pour a lot of money into them without doing their due diligence.
Investors have pulled out $7.6 billion worth of savings in stable coin Tether since the crisis in the crypto market began last week, suggesting the company has paid out an amount nearly double total cash holdings for anxious depositors. Stablecoins are said to have a fixed value pegged to a real-world asset, in most cases 1 USD per token. However, Cryptocurrency instability No Al Bitcoin Shirt, faith in the concept was shaken last Tuesday when another major stablecoin, terra, broke its tie with the USD. That prompted a widespread sell-off in the crypto market, which relies on stablecoins for much of its technical financing.
Tether, the third-largest cryptocurrency by market capitalization, experienced a brief meltdown on May 12 when its value dropped from $1 to 95 cents, due to concerns among savers. that it will follow copper terra and collapse. However, Tether — which is controlled by a private company closely affiliated with crypto exchange Bitfinex — has largely restored its dollar-denominated rate since then. This recovery is due to the company fulfilling its promise to allow savers to always withdraw 1 USD for every Tether they return to the company.