Cryptocurrencies continue to fall as losses hit $1 trillion
May 23, 2022 - 06:58 AM
ISTANBUL (AA) – The decline that started in November last year in the crypto money market continued with the acceleration of escape from risky assets in a high inflationary environment,
Bitcoin and Ethereum carried their downward trends to a seventh consecutive week with losses in the market where reliability is questioned due to recent events in LUNA.
The cryptocurrency market, which has experienced hard ups and downs since it emerged due to its structure, has been hit hard since November with the increase in inflation and the high interest rates.
The question of trust after what happened with stable coin, LUNA, which was issued to stabilize the price of cryptocurrency, UST, which was designed to be equal to $1 on the Terra platform, accelerated the collapse.
The value of LUNA, which was in the top 10 cryptocurrencies and had many investors, dropped to zero and was delisted from the famous exchange place, Binance, which caused instability in the general market.
With the developments, the value of the cryptocurrency market, which exceeded $2.1 trillion at the beginning of April, fell to $1.2 trillion, according to the data by the analysis company Coinmarketcap.
Bitcoin is the crypto asset with the highest market capitalization at $558.6 billion, followed by Ethereum with $237.6 billion.
Bitcoin, which hit its historical high of $69,000 in November, fell to $24,500 earlier this month with instability in the market, seeing its lowest level in one-and-a-half years.
Although Bitcoin recovered some losses at the end of March and was above $48,000, it is around $29,000.
Ethereum also peaked at $4,870 in November, when it entered a downward trend.
The price was at $1,960, closing its seventh consecutive week with a loss.
Experts said that the collapse of LUNA, which is an important part of the cryptocurrency market, still has unpredictable effects on the entire industry.
Emphasizing that the questioning of confidence in crypto assets increases the volatility in the market, adding that a clear regulatory mechanism is needed to eliminate instability.
*Writing by Gokhan Ergocun