Crash of Cryptocurrency! “Bitcoin could drop to $11,000”
The collapse of the Luna cryptocurrency and its associated stablecoin UST, as well as the discounts of the largest projects, have dominated the events in the crypto world in recent days. Bitcoin could fall to $11,000, expert estimates.
The collapse of the Luna cryptocurrency was one of the most spectacular events in the history of the cryptocurrency market. The project lost 99.9 percent. valuation in just a few days, and its capitalization has fallen from tens of billions of dollars to just a few hundred million dollars.
The scale of the collapse affected by the project is best illustrated by its timeline. The price of the cryptocurrency has dropped from over $100 to a fraction of a cent.
XTB specialists told how the whole project worked, presenting a scheme of its functioning.
“During the powerful post-money takeoff of cryptocurrencies, millions of fresh investors entered the market competing to buy various fashion projects. It was then that Luna was created, generating interest due to the rising interest rates for providing liquidity in the system. As the price and market capitalization of cryptocurrencies increased, so did the rewards for investors, which attracted a significant part of the market to Luna,” XTB analysts describe.
“Investors were primarily affected by rising prices, which by themselves do not prove the long-term success and sustainable foundations of the project. For several months, information has been circulating about “Ponzi schemes” and financial pyramid schemes common in the market. The cryptocurrency market is declining and does not “heal” the speculative market,” experts estimate.
One of the threads of the Moon crash is a speculative attack by major US funds, but these are subversions based on leaks circulating online and alleged connections of those involved. However, the fact is that the spectacular collapse of the cryptocurrency also affected the domestic TerraUSD (UST) token, i.e. a stablecoin that should always be kept close to $1.
This was already too much for the entire cryptocurrency market, which began to lose last week, setting new multi-month lows. The largest projects such as Bitcoin and Ethereum have lost about 30% over the past week, respectively. and 36 percent value. The price of bitcoin fell to around 25.4 thousand. dollars, when in November it was close to 70 thousand. On Monday, after recovering from the fall, it traded around $30,000.
“Disrupting the Terra ecosystem by disrupting UST 1:1 convertibility to USD, dropping its main token, Luna, from over $100 apiece to ten cents, a crash in the NFT market, an attempt to disrupt the convertibility of the largest stablecoin USDT from 1:1 to USD, and powerful discounts on bitcoin and ethereum, i.e. largest cryptocurrencies. These are all events that occur simultaneously and in a very short time, and the market is trying to cope with them.
Recent events have also inevitably drawn more attention to the national regulator market. US Treasury Secretary Janet Yellen said the market will be properly regulated by the end of 2022. The US SEC also reported on the destabilizing effect of cryptocurrencies on the state of financial markets, according to DM XTB in a press release.
Expectations of an interest rate hike, the cash phase of the business cycle in anticipation of higher inflation and lower GDP growth, or a Russian attack on Ukraine could lead to lower cryptocurrency prices. However, at present, we are no longer talking about a simple correction, but about a real test of the entire cryptocurrency market,” Conotoxia experts summarize the commentary.
