Why are Crypto Markets Crashing
                     Why are Crypto Markets Crashing
Cryptocurrencies were not 
doing too well since the start of 
2022. In May Bitcoin (BTC) had 
lost almost 40% of its value 
year to date. Binance Coin 
(BNB) and Ethereum (ETH) had 
lost about 48% during the 
same period. During the period 
from mid-May to mid-July in 
2021, the cryptos had dropped 
and Bitcoin also fell by more 
than 45%. 
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Why are Crypto Markets Crashing
Just like any asset class, the 
sudden drop in crypto prices 
could cause the liquidation of 
the long-term position. Just like 
the stock market, it is a cycle 
and these kinds of crashes are 
pretty dangerous for markets 
like Crypto; since they do not 
have much liquidity. Currently, 
the market is seeing some of 
its worst sell-offs since the 
market rally in 2020. 
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So What Exactly Triggered the Crash?
The stock market has lately 
been facing a general 
downturn, especially in regard 
to tech stocks. This had 
already started affecting the 
crypto markets. During that 
time the central banks were 
hiking the benchmark rates 
and also selling assets that 
they had acquired over the 
past two years.
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So What Exactly Triggered the Crash?
Hence investors started to sell 
real assets like crypto to 
safeguard their money. Also in 
early May UST, an algorithmic 
stablecoin lost its peg to the 
dollar and it was tied to 
another cryptocurrency, the 
Luna. They both are backed by 
the Terraform Labs and also 
operate on the Terra 
blockchain.
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So What Exactly Triggered the Crash?
The terraUSD is generally 
known by its list name UST and 
it has an effect on its sister 
token, Luna which also acts as 
the collateral currency to UST. 
These two are cryptocurrencies 
that were created by the Terra 
network which is a blockchain 
project that was developed in 
South Korea.
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So What Exactly Triggered the Crash?
The macroeconomic factors 
are also responsible for the 
cryptocurrency crash. In early 
2020 the Federal Reserve cut 
interest rates to reduce the 
cost of borrowing in order to 
manage the pandemic-related 
economic slump in the 
overall economy.
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So What Exactly Triggered the Crash?
They pumped more money 
into the households and 
businesses. This led to 
inflation rising to the highest 
level in four decades. The 
crypto market has been 
tracking the stock market and 
hence all factors that affect 
the stock market are affecting 
the crypto market as well.
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What is the Future of Crypto Investing?
Currently, there is a 
general slowdown due to 
macroeconomic factors. 
The depth of the downturn 
is still not completely 
known. Some experts are 
optimistic and feel that 
crypto will have a higher 
potential to grow when 
compared to other sectors.
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What is the Future of Crypto Investing?
Some new uses for crypto 
can emerge during such 
challenging times. The other 
reasons are the 
measurement of computing 
power to verify and record 
transactions and the 
network’s hash rate has hit 
new highs. Bitcoin remains a 
risky asset but may 
eventually stabilize over a 
period of time.
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