Cryptocurrency indeed is a hyped-up investment model through this site https://bitcoin-billionaire.com/ Bitcoin is the first crypto token that entered the global investment market. The primary purpose of this token was to enable easy transactions between peers. But, the underlying technology and working model soon made Bitcoin an investment.
Many early investors in Bitcoin have made more than 200% profits through it. Along with the growing investment interest, the number of crypto tokens also increased. Today, there are more than 14k cryptos in the investment market. The total market volume of cryptocurrencies has increased by $3 trillion in 2021. Other than cryptos, there are stable coins, non-fungible tokens, etc.
All these investment models have made cryptocurrency a popular investment globally.
Now with growing investment, there is also the risk of investments. The crypto market is highly volatile. There is no control over price fluctuations. The lack of governance and involvement of regulator authorities is the primary reason. Additionally, the market is also open 24*7. It means the market is working while an investor is sleeping. The market prices are driven by various external factors as well.
Additionally, technological advances and speculations about new features also add to price fluctuation. The ability to liquidate crypto investments is another important reason driving price volatility.
Market performance of cryptos in 2022
Yes, the year 2022 indeed started on a bad note. The cryptocurrency market saw a huge fall in prices. More than $1 trillion in market investments were wiped out from the industry. Many popular coins including Bitcoin, and Ethereum are feeling the pressure. Bitcoin prices fell from $48k to $20k per token. This is the highest fall recorded in the history of Bitcoin.
Many market experts continue to speculate on the current changing trend. Investment experts think that the market is witnessing a bear market style. Many pessimistic investors are too early to withdraw their funds from the market. Also, many corporate and institutional investors are removing their funding.
Understanding Terra (UST)
Terra Luna is the worst-hit coin in the current market crisis. The token was traded at $80 at the beginning of May. For another 30 days, the token price was reduced to $0.0001. Is it possible for Luna to recover from the current market condition?
Reason for Luna’s crash in the market
Various reasons contribute to the price crash of cryptos in the global market. The primary reason for Luna’s crash is its supply and demand. In May, the total Luna token in supply was around 300 million. Today, the total Luna tokens are around 6.5 trillion. It means the supply of this token has increased and demand is not moving. There is a high amount of inflation on this token. Another reason for the token crash is the underlying algorithm. TerraUSD (UST) and Luna worked interchangeably. Users were allowed to exchange 1 UST to mint $1 Luna. This algorithm made it difficult for Luna to survive. A large volume of UST was exchanged causing a hyper-inflation on this token.
How can Luna recover?
The only way for Luna to reach back its original sale price is by reducing supply. The token needs to reach back to its supply volume of 350 trillion. But, to make this happen the underlying algorithm UST needs to play up. The developers are planning to airdrop Luna tokens to investors.
Is USDT in the pipeline for a crash?
Now, this is a worrying question in the minds of every USDT investor. Since both these tokens worked in unison there is a need to deep dive into this topic. There have been speculations about USDT facing a crypto crash situation. But, the largest stablecoin player in the market was soon to respond to this speculation. The token makes use of various combinations to retain price stability. More than 47% of the total USDT investment is corporate treasury investment. As per expert opinion and inputs from developers, the token is not likely to hit rock bottom.
While more than $3 billion has already been wiped out, developers are working on their recovery plans. The current market condition is highly unpredictable. It is a wait-and-watch situation to understand how the crypto market will revive in the coming months.
