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For months, there had been warning signs that the cryptocurrency market was due for a correction. But no one could have predicted the sheer scale of the collapse that would begin in early May 2022.
At the storm’s center was Terra, a $50bn algorithmic stable coin ecosystem that saw its flagship token, TerraUSD (UST), plunge in value. The fall of Terra’s stable coin exacerbated weakness in investor sentiment, causing bitcoin (BTC) to plunge to $25,000, its lowest level in over 14 months.
If the Turing Award was the Nobel Prize of the computer science world, then the equivalent in the cryptocurrency realm would be the Crypto Winter – a long period of stagnation and decline. And like a real winter, it could be sparked by any number of things.
For instance, the start of a global monetary tightening cycle had already caused a gradual selloff in risk assets, from equities to cryptocurrency. Terra’s debacle could be the writing on the wall for a prolonged crypto winter to come. Of course, it’s important to note that such market cycles are inevitable and even necessary for healthy growth in the long term.
The crypto market crash of 2022 continues to wipe out billions of dollars in value, sending shockwaves through the entire financial sector. Bitcoin and Ethereum are two of the most well-known cryptocurrencies on the market. Bitcoin fell below $20,000, and Ethereum dropped under $1,200 at the start of the week, marking a new 18-month low for the two digital currencies.
Both Bitcoin and Ethereum have lost more than 70% of their value since their all-time highs in December 2017. However, Bitcoin remains the largest cryptocurrency by market capitalization, with a value of around $350 billion. Ethereum is the second-largest, with a market cap of $120 billion.
It’s no secret that cryptocurrencies are subjected to volatile swings making them a risky investment. However, most of the crypto world believes that Bitcoin and Ethereum will eventually recover and reach new all-time highs.
As the blockchain industry continues to evolve, so do the opportunities for businesses to leverage its capabilities in innovative ways. MetaBlaze is a company on the cutting edge of blockchain technology, merging the best features from rapidly growing crypto sectors within its…