The Rollercoaster of Crypto Valuation
On May 12, the total cryptocurrency market capitalization plummeted to its lowest point in ten months. The crypto world held its breath as the total capitalization hovered around the critical support level of $1.23 trillion. Throughout the following seven days, the situation seemed relatively stable, with Bitcoin (BTC) sneaking up by 3.4% and Ether (ETH) making a more reserved ascent of 1.5%. Now, we find ourselves standing at a market cap of approximately $1.31 trillion, which feels about as solid as a house of cards in a wind tunnel.
Ripple Effects from Terra’s Turmoil
Ah, the echo of Terra’s collapse—like that ex that just won’t go away. Its disastrous fallout continues to cast shadows over the crypto markets, which have already been on shaky ground. The decentralized finance sector is feeling the heat too, with the recent decline in traditional markets stealing the spotlight by exhibiting a jaw-dropping $7.6 trillion loss in market cap from the Nasdaq. It looks like 2020’s Dot-Com crash decided it wasn’t done rehashing its glory days.
Fed’s Tightening Grip on the Market
Fast forward to May 17, when Jerome Powell, Chairman of the U.S. Federal Reserve, came out swinging with the intent to tighten inflation by raising interest rates. But here’s the kicker: he warned that this tightening could crunch the unemployment rate. Talk about a mixed bag! Unsurprisingly, this news hit the crypto market hard, dragging down the “Fear and Greed Index” to a dismal score of 8/100—its lowest since March 2020! When oil futures went negative, it was as if the financial universe said, ‘Hold my drink.’
Winners and Losers: The Weekly Breakdown
In the midst of this chaos, not all cryptocurrencies are wallowing in despair. While Bitcoin and Ether are just tiptoeing forward, some mid-cap altcoins are cutting loose. Let’s take a peek into the winners and losers:
- Monero (XMR): Up by a whopping 22%! Investors eagerly await the
