Everything falls in the crypto industry

For example, the US stock market is at a fever pitch. The Dow Jones index (which includes the 30 largest American companies) has fallen by 17.5% since November. The S&P 500 index (500 US companies with the largest capitalization) fell by 21.5%. And the technological Nasdaq showed minus 33%.

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During this time, the central stock indices of Asia and Europe experienced various declines from 4% to minus 18%.

That is, the fall of crypto-assets occurs against the background of a wide sell-off of risky assets worldwide, and not only in cryptocurrency.

It is also worth noting that not only cryptocurrencies are depreciating, but also just currencies. In the largest world economies, record inflation has been recorded for decades.

As a result, the monetary policy of various countries becomes tougher. The US Fed has sharply raised the key rate to a range of 1.5-1.75% to curb inflation, and similar actions are expected from other global regulators.

Investors’ money will flow more actively into risk-free assets. And the risky ones — cryptocurrency, will receive less attention, and an unpredictable future awaits them. The fiasco of one of the well-known crypto-currency projects, which further undermined the confidence of investors, became indicative.

There is less and less trust

The year 2021 was marked not only by the peak of the cryptocurrency market but also by the increased attention of regulators to it. What is the value of just banning cryptocurrencies in China? Other major market regulators, such as the US and the EU, have often criticized the cryptocurrency market for its instability and vulnerability. And not for nothing.

Last month, owners of the algorithmic stablecoin TerraUSD and crypto Terra Classic lost their money in one day. This significantly hit the confidence in the crypto market.

The cost of the TerraUSD stablecoin today is 0.7 cents, although it should always be around $1. The price of the Terra Classic cryptocurrency, which was $80 before the collapse, has now fallen below one ten-thousandth of a cent.

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The foundation behind these projects, Luna Foundation Guard spent almost all of its reserves to protect the token’s peg to the dollar, but to no avail. This month, the US Securities and Exchange Commission opened an investigation into the developments to determine whether the platform violated rules to protect its investors.

Therefore, for example, even minor fluctuations in another popular stablecoin, USDD, cause significant concerns. The cryptocurrency usually did not deviate from $1 even by a cent, and on Saturday its value collapsed to $0.92.

According to the founders of USDD, they are correcting the situation and assure the safety of the project. However, panic among investors, taught by the sad experience of TerraUSD, is very damaging to such projects and the crypto industry in general.