Around $1 trillion lost from the crypto sector by 2022, erasing almost 40% of its current market value

Terra’s demise has left a void in the cryptocurrency market, and market participants have opted to remain cautious in the face of uncertainty.

According to CoinMarketCap statistics, the worldwide cryptocurrency market value was $2.2 trillion on January 1, 2022, but as of May 20, it was $1.29 trillion, a drop of 41.36 percent since the beginning of the year.

Market capitalisation has lost $910 billion since the beginning of 2022 owing to a number of factors, including pessimistic sentiment.

Crypto Fear and Greed Index (CFGI) has plummeted to its lowest level since the index’s inception in the first quarter of 2017. Market dominance, volatility, volume, social media, and surveys are just some of the parameters used by this well-known technical measure to gauge the market mood.

One number between 0 and 100 is used to represent “extreme fear” and “extreme greed,” with 0 representing “extreme fear” and 100 representing “extreme greed.” Since recently, the CFGI has been ranked 8th, which is close to the market mood that was reported at the time of the COVID-19 collapse in March 2020.

Fear in the market seems to be sparked by uncertainty in the regulatory environment, rising interest rates in the United States, and rising inflation in other nations. 

In spite of the fact that Bitcoin (BTC) is presently trading at more than 50% above its all-time high, the downward trend seems to have impacted the market’s psyche. While Terra’s (LUNA’s) stunning decline over the previous several days has definitely contributed to the pervasive pessimistic attitude.

BTC has regained $30,000

Although Bitcoin’s price fell to an 18-month low over the weekend, it has now risen over $30,000 again. In light of the drop, analysts have raised the possibility of another “crypto winter” similar to the one that happened in 2018.

At a time when El Salvador’s President Nayib Bukele is hosting delegates from 44 countries to discuss adoption, Bitcoin’s price is in flux.

Last but not least, the economist and founder of HS Dent Publishing Harry Dent revealed his market prognosis for Bitcoin and warned that the flagship digital currency might collapse to $3,000 before exploding to $500,000 in a future market boom if it were to go that low.

Also Read: European Families See Crypto As A Means Of Increasing Savings