The crypto market has suffered a heavy blow because of the bitcoin crash that started on Monday, May 9th 2022. A lot of companies like Coinbase were affected. Coinbase lost half of its value this week and this was its biggest loss to date.
A dramatic meltdown in bitcoin and other cryptocurrencies appears to have slowed, with investors left counting their losses after one of the most dramatic plunges in recent times.
The whole market is still significantly down over the last week. Ethereum, for instance, has been particularly hard hit and lost 24 per cent of its value in the last seven days.
As the price of Luna crashed, large Luna holders As the price of UST crashed, large luna holders cashed out, causing the supply of luna tokens to jump, and its price to crash. Luna lost 99% of its value Thursday.
Panic struck the market this week after the Terra (LUNA) cryptocurrency fell by more than 99 per cent overnight, and the wider crash has pushed another stable coin, Tether, below its dollar peg.
According to Bloomberg Intelligence, luna’s sharp value decline looked like the worst day for a financial product ever seen and it prompted cryptocurrency exchanges to delist the coin, bringing its trade to a halt as there was no liquidity in the market.
A possible reason for the severity of this crash is the particular pricing structure of the UST token, said Edward Moya, a senior market analyst at OANDA, a foreign exchange platform.
The UST operates differently from other stable coins, such as Tether, which are backed by a government-backed currency or commercial papers. It is an algorithm-based stable coin and uses a complicated method, with the help of luna, to ensure its value is maintained against the dollar.
There are signs that dramatic fall could be turning around, however. Bitcoin is up 14 per cent over the last day – and back through the important psychological milestone of $30,000 – and the market as a whole is up 13.5 per cent.
Bitcoin price has been going up but very slowly since yesterday Friday, 13th May 2022. Looking at the meltdown, people are beginning to wonder about the future of crypto and if their assets will be safe in the future.
Bitcoin has recovered from many crashes in the past but that is not to say that it will recover from this one. But if you were to look at the slow upward movement to return to its previous price point, you could say that there’s hope. This is not financial advice though.
I speculate that more policies will be put in place because of the severity of this meltdown to reduce the chances of it happening in the future. The question now is, how soon will bitcoin stabilize above $30,000?
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