Crypto Crash – Why Is The Crypto Market Crashing?

by | May 14, 2022 | News | 0 comments

This post is all about the recent crypto crash.

crypto crash

Between May 9 and May 10, 2022, the crypto market experienced an embarrassing fall, leaving investors to wonder what will become of their portfolios.

According to CoinMarketCap data on Monday 9th May 2022, the global crypto market cap shrunk to $1.54 trillion, decreasing by 2.28%.

And as you would expect, almost all cryptocurrency projects have decreased in value.

For example, the overall Bitcoin price has decreased by over 30% in the last 7 days and the price is currently $27,962.46 (12/05/2022).

That’s quite low compared to the close to $38,000 that we saw at the beginning of the month.

So, what exactly is the reason for this crash?

The first reason is the panic over inflation and fears of a potential recession.

When the Fed Reserve announced that interest rates would rise by half a percentage point on the 4th of May, 2022, investors panicked.

Many folks started pulling out their funds from crypto both to make it liquid and to try other investment options like land and property.

And you know how it is, once people start pulling out their funds, the crypto market starts to dip.

Some experts also say that Terra’s LUNA and UST tokens collapse is a major contributor.

Recently, TERRA collateralized its tokens with Bitcoin by buying over $1.5 Billion worth of Bitcoin.

But then UST, the stablecoin of Terra Ecosystem de-pegged.

And there are allegations that the Terra Team had to sell off the Bitcoin purchased earlier to invest back in UST in an attempt to regain the peg.

Needless to say, this move did not yield the expected results.

Besides, news on the street is that there was a sort of conspiracy against the TERRA ecosystem, due to their recent success in the crypto space.

Whoever it is must have gone all the way because right now Luna is less than a dollar and the stablecoin UST has remained de-pegged.

Thus, distorting the crypto market.

Too bad, as this coincided with the stocks and NASDAQ going down.

So, investors were pushed to sell, sell, and sell, invariably leading to the market crash.

You’re probably asking, what can investors do now?

Nothing much to be honest.

Just relax and take a chilled drink.

Go play video games and do your other activities while we hope that the market gets backs on its feet.

Try not to look too much at your portfolio.

Find solace that this has happened before and the market survived it.

It’s only a matter of time before traders and investors will smile again.

That’s all I have for you in this post. I hope it was worth your time.

Please share it with your friends, thank you!

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Chinma Udeji
Professional Cryptocurrency Writer. I break down complex crypto topics into simple words.