Crypto prices plunge

The crypto market has seen major fluctuations in terms of prices over the past few years. While some crypto investors made incredible profits and were able to cash out early, others weren’t as fortunate. Digital assets such as cryptocurrencies are known for their high volatility, however, nobody could have predicted the massive crash that was to come.

Even the world’s most valuable and popular cryptocurrency was not strong enough to survive the crash. Bitcoin prices have reached $23,000, which is exactly one-third of its record high of nearly $69,000 in late 2021. Bitcoin also acts as a good indicator of the crypto market as a whole. So similarly, the total market cap of cryptocurrencies has plummeted from $3 trillion to $1 trillion in the same amount of time.

Stablecoins, which are generally considered the safest crypto investment, has also proven to be risky for investors.  Terra is one such stablecoin that is supposed to be pegged to the value of a US dollar and backed by cash reserves. However, Terra has completely collapsed and lost almost 97% of its value.

According to experts, the downward spiral of crypto prices is attributed to the current global climate. Factors such as the war in Ukraine, fear of inflation, and high-interest rates all lead to a sense of uncertainty for investors. This, in turn, has negatively affected both the cryptocurrency and stock market. In addition, the US Dollar Index is now trading at its highest level in twenty years which also negatively affects crypto prices.

With crypto prices plunging, even major trading exchanges also temporarily paused withdrawals and filed for bankruptcy.  Crypto lender Celsius has frozen customer withdrawals and transfers since June 13 and owes its users around $4.7 billion, according to its bankruptcy filing. This caused further panic for investors who no longer have access to their funds and may not get their money back anytime soon.

Bitcoin and other cryptocurrencies were previously considered to be stores of value just like fiat currencies due to their durability and scarcity. Nowadays, that is no longer the case as crypto has become a risk asset that behaves just like stocks. It is almost impossible to predict the future of crypto, given everything that is happening in the world. Many investors have been left wondering if the crypto market will start to bounce back or if we haven’t seen the end of the crash yet.

You May Also Like

About the Author: Webby Feed

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.