If a person from the beginning of 2022 meets a person from today, they will look like madmen to each other. Indeed, no one expects such fundamental changes in the global market and politics, which leads to the biggest cryptocurrency crash we have ever seen. Or is it?
While most of the crypto enthusiasts are still in shock, some of them are agitating toward selling all the coins for real money. Time to talk about the real reasons for that event, its repercussions, and the future implementation of that knowledge.
What Has Led To The Global Market Crash?
From January to the beginning of May of 2022 S&P500 index shows a steady decline with a couple of spikes which are not changing the whole picture. Analysts tie it to the huge inflation of USD compared to the years before COVID-19.
Another factor is the natural resources market and all the problems it is facing. Since the beginning of the war between the Russian Federation and Ukraine, oil and gas prices are hitting all-time highs in the 21st century. The same can be said about the grain market as these 2 countries have a de-facto monopoly for some of the positions in demand.
All of that and the overall inflated price of Bitcoin led to the inevitable conclusion for all the crypto market. While it has nothing to do with the practical value of cryptocurrencies, their role as a long-term investment was severely hurt by the UST-Luna scam.
UST Case 101
The issues with the Terra Luna coin and the head of the project, Do Kwon, comes down to the fact that stablecoin has to be backed up by something. Otherwise, it will be another Ponzi-crypto scheme. That was not the case with the stablecoin by this company called TerraUSD (UST) backed up by US Dollar.
The problem was in the way it was presented in the beginning. UST was not just a regular stablecoin, all users could have increased their funds by 20% just by having the coin. Some experts raised the suspicion, but their voices were hardly recognizable among the general crowd. As a result, more and more regular traders became involved with this currency. And when some of the wealthy players decided to pull out, it led to a chain reaction multiplied by the state of the global market.
A Good Opportunity To Make Money
As a result, Bitcoin now should be perceived not as another Ponzi-LUNA-like scheme but as a part of the global market. It is on the decline right now, which inevitably leads to the low prices in all the market actives. It also may raise more questions about BTC consensus on the crypto market. More currencies will emerge, and any investor should have a handful of altcoin exchange projects on their side:
- Gemini
- Coinbase
- Cryptocom
- FTX
- Binance
This is pretty much the Top 5 picks where each one has unique benefits. It would be a good idea to diversify the risks and buy some crypto stock on each of these exchanges. Which also will give you a great opportunity to test all the systems these sites can offer.
