Crypto crash: Bitcoin extends losses, drops below $30,000-mark

Bitcoin was more than 55 percent down since its all-time high of $69,000 in November last year

May 10, 2022

Millions of investors in panic mode as cryptos see massive decline

On Tuesday, the global cryptocurrency market witnessed its worst phase ever, with Bitcoin dropping below $30,000 per coin and leaving millions of investors in a panic mode. The overall global cryptocurrency market dropped 13 percent and was hovering around $1.37 trillion market cap, which is its lowest this year.

Bitcoin extended losses, dropping below $31,000 for the first time since July 2021, putting its decline from a November record high to more than 50% amid a global flight from riskier investments. Bitcoin was more than 55 percent down since its all-time high of $69,000 in November last year.

Other digital coins also suffered double-digit-percentage drops, led by Cardano (20 percent), Solana (16 percent), XRP (13 percent), BNB (16 percent), and Ethereum (10 percent), Decrypt reported.

Experts said that rising interest rates, along with weakening economic activity, have created a risk-off environment.

Terraform Labs (TFL), the organization behind UST, cryptocurrency LUNA, and Luna Foundation Guard (LFG) emptied its treasury wallet of all of its bitcoin (about 42,530 bitcoin) or $1.3 billion.

The UST stablecoin lost its 1:1 dollar peg ratio for the second time in the past three days and dropped as much as 5.3 percent to 95 cents on Monday, reports TechCrunch.

The decline can be attributed to nervousness over the US Federal Reserve‘s determination to tackle inflation. The Fed last week announced an interest rate increase of 50 basis points.

In what could further dampen the mood of crypto investors in the country, the Goods and Services Tax (GST) Council in India is also mulling a 28 percent tax on cryptocurrencies, at par with the current GST on casinos, betting, and lottery.

Bitcoin investors are likely to lose up to $545 million this year, owing to various reasons like forgetting passwords to their wallets or making a mistake in recording their “seed phrases”, according to a new report.

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