{"id":36383,"date":"2022-06-04T12:36:31","date_gmt":"2022-06-04T12:36:31","guid":{"rendered":"https:\/\/harchi90.com\/the-crypto-market-dropped-in-may-but-june-has-a-silver-lining\/"},"modified":"2022-06-04T12:36:31","modified_gmt":"2022-06-04T12:36:31","slug":"the-crypto-market-dropped-in-may-but-june-has-a-silver-lining","status":"publish","type":"post","link":"https:\/\/harchi90.com\/the-crypto-market-dropped-in-may-but-june-has-a-silver-lining\/","title":{"rendered":"The crypto market dropped in May, but June has a silver lining"},"content":{"rendered":"
May 2022 was not for the faint-hearted. Even the most embattled and experienced crypto traders were tested in the first two weeks of the month on a brutal drop following the United States Federal Reserve’s announcement that interest rates would be rising by 0.5%.<\/p>\n
Crypto used to exhibit a lower correlation with real-world events and was generally unaffected by capitalistic successes and failures. However, a very steady approximate peg between Bitcoin (BTC) and the S&P 500 index was seen throughout the first five months of 2022. Inflation and war fears have not been kind to both markets either.<\/p>\n
Crypto mimicking the equity market could be due to the massive market capitalization growth in 2020 and 2021. At unprecedented rates, retail investors from equities have flocked to cryptocurrencies, causing a far greater overlap in price movements.<\/p>\n
Bitcoin dipped below $ 29,000 before coming back up to $ 31,800 on May 31, while Ether (ETH) fell to just above $ 1,700 before reclaiming prices above $ 1,900 by May 30. But many altcoins fared far worse, and the resulting reactions from once-patient traders turned to about as much FUD as one would imagine.<\/p>\n
TerraUSD (UST) – now known as TerraUSD Classic (USTC) – was a stablecoin built on the Terra blockchain and sitting in the top six stablecoins by market cap. However, on May 9, the coin, which was designed to maintain a $ 1 value all the time, progressively dropped down to $ 0.29, leaving the crypto world in shock. Its price has not recovered since.<\/p>\n
As for how this impacted the rest of the stablecoin landscape, a major \u201cshuffling of the deck\u201d resulted from a trusted stablecoin’s reputation imploding overnight. Tether (USDT), the largest stablecoin by market cap, saw a fall of its own, albeit one much less drastic, to $ 0.95. It has since recovered, but there have been renewed claims about the coin’s solvency.<\/p>\n