5 figures to understand everything about the biggest crypto crash

“Winter is coming” we heard in the famous series Game of Thrones. In the crypto market, winter seems endless. Investors know that this time of year always means falling values. But in 2022, the winter is particularly harsh.

The crypto crash edition 2022 will undoubtedly remain in the annals. Apart from the dizzying declines of the main cryptos, this crypto crash was mainly marked by the soap opera Terra/Luna, the stablecoin which only had a stable in name. We summarize the situation in 5 figures.

50

50% is on average what the best known cryptocurrencies have lost in value in this market. Since January Bitcoin and Ethereum, the two major cryptos, have lost more than 50%. Bitcoin even lost 57% of its value from its historical maximum.

30,000

It was the symbolic threshold below which Bitcoin should not fall if it did not want to create panic. Missed: Bitcoin found itself well below. While it was trading at $67,700 last November, it was trading at $48,000 at the end of March. During the dark week of May, bitcoin ended up around $28,000. And yet, despite these impressive declines, bitcoin has already seen worse.

2,000

This is the threshold below which Ethereum, the second most important crypto on the market, should not fall. Bad luck, Bitcoin dragged the whole market down. Ethereum ended up well below $2,000at $1,625 exactly on Thursday, May 12, 2022. A Black Thursday so investors will remember.

Since then, Ethereum has recovered but has still not crossed the $2,000 threshold at the time of writing (Monday May 16). It will be recalled that ETH traded at 4,224 dollars on December 1st.

0

This is all that’s left of the Terra/Luna stablecoin. Nothing. While it was among the hottest stablecoins, this active crypto plummeted until it disappeared from exchanges.

The story of Terra/Luna has become a textbook case. In principle, a stablecoin should not collapse. Indeed, a stablecoin is, as its name implies, stable. Thus, one stablecoin is equivalent to one dollar. The initiators of the project ensure that their stablecoin is backed by dollar assets. In theory.

Some stablecoins rely on an algorithm. This was the case of Terra/Luna. However, investors have driven the Terra/Luna algo completely crazy, lowering the crypto/dollar ratio in an unprecedented way. Until it reaches almost zero. This led to its withdrawal from the market.

1 trillion

This is the total decline in value of the crypto market over the last six months. It’s colossal. This fall mainly accelerated between May 7 and May 14, at the same time as the tech bubble on Wall Street was deflating.

During this week, bitcoin lost 18% of its value. Above all, the market chained seven weeks in the red, a first since 2014. And the worst is yet to come according to some experts.

“There is still downside potential for the next few days” Scottie Siu, chief investment officer of Action Global Asset Management, a Hong Kong firm managing a crypto fund, told Reuters. I don’t think the worst is over.”. Great.

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