The value of the cryptocurrency fell substantially and led to the erosion of $600 billion in digital asset market capitalization. The cryptocurrency market reported a wide-scale selloff as macroeconomic conditions have worsened. Inflation around the world has increased, as a result of which major economies have revised their interest rates. The US Federal Reserve has raised interest rates twice since March in a bid to curb the increasing inflation. The general investor response to the increase in interest rate is to unload risky assets such as cryptocurrencies. As large investors (often called crypto whales) sought to sell their cryptos, the market turned volatile, and the value fell.
The cryptocurrency market is built predominantly on the blockchain technology, it is fragmented into four major categories:
The Global Meltdown of Cryptos:
As fears about the global economy spread, investors have continued to sell off their digital assets. The value of cryptos from the above mentioned four categories fell considerably:
TerraUSD (UST), a stablecoin, is the tenth-largest cryptocurrency by market cap. It being a stablecoin, UST was pegged to the US Dollar, with one UST equal to nearly one USD, but a decision to uncouple the UST from the US Dollar led to a sudden crash in the value of UST, with one UST equivalent to nearly $0.17 as of 13th May 2022.
Following the decision to uncouple the TerraUSD (UST), the Terra Luna crashed 99.96% in value from its record high of $118 in April 2022 to below a cent in value on 13th May 2022. This major collapse of Luna caused TerraLabs to halt the Terra blockchain.
Shiba Inu is based on the PoW mechanism and is transitioning to the PoS mechanism with the forthcoming introduction of ETH 2.0. Shiba Inu was subject to similar volatility with more than 50% of its value being shed in a month and it was trading at $0.00001314 on 13th May 2022.
Bitcoin, the PoW-based crypto and the world’s first crypto, fell below the $30,000 mark twice in the past week. Bitcoin (BTC) dropped 55% in value from $66,971 in August 2021 to $30,366 on 13th May 2022.
The fall in the value of the cryptocurrency affected the whole of the cryptocurrency market and even cryptos pegged to the conventional currencies also reported a fall in their value.
United States of America
China
United States of America
United States of America
France
Spain
China
Don’t wait - discover a universe of connected data & insights with your next search. Browse over 28M data points across 22 industries.
Access more premium companies when you subscribe to Explorer
Contact the team or request a demo to find out how our data can drive your business forward