The unprecedented rise in the value of cryptocurrencies we witnessed in 2021 was replaced by a heavy crash that saw Bitcoin, the premier crypto.
July 28, 2022
The unprecedented rise in the value of cryptocurrencies we witnessed in 2021 was replaced by a heavy crash that saw Bitcoin, the premier crypto, drop to $18k a few weeks ago.
One of the primary triggers for this situation is rising inflation, and tighter monetary policies in the U.S. Higher credit rates and fears of recession drove investors out of risky assets, including cryptocurrencies. Thus, resulting in outright digital assets value depreciation.
The following incident that intensified the market decline was the UST depegging from $1 and the sale of their BTC reserves by LFG to maintain the UST’s dollar peg. Holders began selling UST in a panic and exiting the Terra ecosystem massively, leading to its collapse.
On June 13, the token price of crypto lending platform Celsius (CEL) fell about 50% after its administration announced that it was suspending its withdrawal function due to “extreme market conditions.” The insolvency is rumored to be the collapse of the Terra ecosystem, in which Celsius was a prominent player.
Market observers point to Celsius’ investment of about $436 million in the ETH Stable Fund (stETH) as a liability.
Another victim of Terra’s collapse was Three Arrows Capital (3AC), the largest cryptocurrency hedge fund in the world, which announced its insolvency.
3AC had invested about $200 million in the Terra ecosystem in early 2022. The subsequent fall in cryptocurrency prices made it impossible for the company to meet its deposit obligations, prompting rumors of liquidation.
Investors predict that a tipping point in the market has already occurred, and a rebound is inevitable, as many investors have begun to buy the cryptocurrency at reduced prices.
However, the market’s growth rate is still unknown due to the ongoing high inflation rate and the global macroeconomic crisis. But what is certain is that non-speculative projects with actual values such as a strong product and a bond to physical, tangible assets will remain under the scrutiny of investors.
And that means DeHealth — backed by accurate and valuable medical data — stands a good chance of emerging victorious from the crypto winter.
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