The cryptocurrency market lost about $ 1 trillion in 2022, is a total collapse close? |

The year 2022 will go down in history as one of the most turbulent for cryptocurrencies. Since the beginning of the year, cryptocurrencies have begun to experience small declines that have deepened over the weeks. If we take into account the level of the crypto market since the beginning of the year until today, we realize that the market has lost about $ 1,000 billion.

This happened in a rather complex context for cryptocurrencies. Macroeconomic concerns are becoming more serious and regulators are looking more closely at cryptocurrencies, which could lead to more monitoring and restrictions, which will ultimately also affect how investors use cryptocurrencies.

And as if the above were not enough, what happened with Terra’s collapse was without a doubt one of the hardest hit events on the market. This reduction in a stablecoin caused the loss to accelerate, leaving the most important and virtually all cryptocurrencies quite low and in the red.

Also on May 18 this year, Gary Gensler, president of Securities and Exchange Commissionparticipated in a hearing organized by the Licensing Committee of the United States House of Representatives, where he warned of the risks posed by cryptocurrencies.

He is particularly concerned that if stack coins fall and investors already suffer large losses, there is no real measure of what can happen to cryptocurrencies that are not stable and constantly fluctuate.

It should be noted that this is not the only regulator that has talked about cryptocurrencies in recent days. One of the most recurring concerns is that cryptocurrencies may affect traditional financial systems, which is why these devices are likely to start trading very soon.

Is the collapse imminent?

The question of the collapse of the cryptocurrency market is constant. This is a topic that has been discussed on various occasions and every time there is a price drop, we talk about it. On this occasion, the chairman of the Commodity Futures Trading Commission said on May 16 that he thought cryptocurrencies would go down.

He points out that at some point cryptocurrencies will go down, causing huge losses for cryptocurrency investors. This will then spawn a “domino effect”, Where traditional assets and markets can be affected. This undoubtedly raises concerns among regulators, which is why they have indicated that they will soon take preventive measures to prevent these conflicts from developing.

Another who has a similar stance is the US Treasury Secretary, who believes that sales in the cryptocurrency market could become more serious. And if that happens, it could spread to traditional markets. In addition, he told the country’s Senate Banking Committee that digital assets can pose serious risks to the global economic structure, and therefore there is a need to strengthen supervision, but it must be supervision, coordinated and not an isolated supervision, for what is sought, is to protect the system and investors.

These views have also become recurring among Federal Reserve officials and other regulators who are confident that cryptocurrencies will fail. Some also said that this is not the first time they are warning about the problem, last year the President of the Federal Reserve Bank said in an interview that they should be careful about buying cryptocurrencies because many of them have no value, so what happens and can happen was predictable.

Is there a chance for improvement?

In the cryptocurrency market, there is always a chance for recovery, even in the darkest times. Recently, the owner of Galaxy Digital said that 75% of cryptocurrencies will not succeed. He has also lost about $ 6 billion of his fortune since the crash began to register, but he remains optimistic about the use of cryptocurrencies.

In a letter to investors published on May 18, he assured that cryptocurrencies will not disappear because the cryptocurrency community is quite strong and resilient. He thus gave investors some hope for the future and said that this was only the beginning. And that it may be a tough time, but the recovery will eventually come, and then prosperity will return to the market.

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