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    Home»Business»What’s Driving the Crypto Crash?
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    What’s Driving the Crypto Crash?

    Amber HeardBy Amber HeardSeptember 13, 2022Updated:November 4, 2022No Comments4 Mins Read
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    Crypto Crash
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    Table of Contents

    • What’s Driving the Crypto Crash?
      • Bitcoin
      • Litecoin
      • Ripple
      • XRP
      • Tether

    What’s Driving the Crypto Crash?

    Cryptocurrency crash experts have compared the current crypto market’s decline to that of the stock market in 1987, when the equities market went through months-long corrections before recovering. However, unlike equities, crypto moves much faster. This means that the crypto market could rebound much faster. Hence, it is important to understand what is driving the crypto market’s collapse before investing in it. This article will explore the main factors behind the sudden fall in cryptocurrency prices.

    Bitcoin

    A Bitcoin crash is a cyclical event that occurs every so often. The cryptocurrency price is based on speculation, and can fall or rise dramatically in the space of 24 hours. The recent crash was prompted by a variety of factors, including negative stories about the currency and threats of further regulation. While the price of Bitcoin has plummeted recently, the industry has seen similar drops before, and each time, it has recovered.

    In the United States, the Federal Reserve has imposed new regulations on cryptocurrencies. This has caused investors to sell off their holdings, and is a factor in the overall price drop. Meanwhile, a crypto shadow bank, the Celsius Network, suspended deposits and froze depositor withdrawals, citing inflated rates. Another recent example is the case of MictroStrategy, a cryptocurrency investment firm. This firm borrowed $205 million from Silvergate Capital in March, secured against 19,466 bitcoins. As the price of Bitcoin has declined, investors have become less confident in their investments.

    Litecoin

    Unlike other cryptocurrencies, Litecoin has a monopoly on transaction speed. Depending on the site you choose, transactions can be as fast as several thousand per second. However, some sites have limitations on the amount of money that can be withdrawn at a time. This can make it difficult to withdraw even moderate amounts of money. Fortunately, there are a number of sites that offer instant withdrawals for Litecoin.

    Litecoin price forecasts vary widely, but most forecasts have a bullish outlook for the coin. The platform predicts that the coin will double in price within five years, and it may even reach $3K before the decade is over. Other analysts, such as TradingBeasts, are more bearish and see the coin falling until the end of 2023. But even if Litecoin does drop, it will continue to rise for another few years, according to their forecasts.

    Ripple

    The Ripple crypto crash has knocked the XRP coin down 74 percent from its high. Since its high on Jan. 4, Ripple’s XRP has lost more than $44 billion. It’s now worth less than $3.84. Ripple co-founder Chris Larsen has lost nearly $44 billion in his XRP holdings. According to Forbes, Larsen is the largest shareholder in Ripple with a stake of $15.8 billion.

    The Ripple price fell by 33% in less than two months, and by 30% in a single day. As a result, it was one of the hardest hit cryptocurrencies. This is because the SEC lawsuit against Ripple made its market position unstable.

    XRP

    The XRP crypto crash has caused the prices of other cryptos to plummet. Prices of Bitcoin, Ethereum, and other popular cryptocurrencies have also plunged. XRP has fallen below $0.30 in recent days. On 4 June, it briefly broke through that price mark. By 22 June, the crypto reached its nadir of $0.5127.

    Ripple’s price has been under pressure since the US Securities and Exchange Commission sued its founder and current CEO over the $1.3 billion raise through an unregistered securities offering. The lawsuit alleges that the company did not provide sufficient warnings. While the SEC suggested dismissing the claims, the US District Court for the Southern District of New York rejected this suggestion. The court noted that increasing the amount of time and cost of a lawsuit can cause undue prejudice to the plaintiff. Furthermore, the trial process can be complex.

    Tether

    In recent weeks, the price of the tether crypto currency has plummeted, with the price falling below $1 a cent. While this is not a huge drop, it is a big deal in the crypto industry. The fall in the price of tether is a result of two major factors. First, the collapse of another “algorithmic” stablecoin has a ripple effect on tether. Second, there is regulatory uncertainty.

    The cryptocurrency industry is generally nervous, and several of the leading players in the industry are facing financial troubles. The Dutch firm Celsius, which held more than $10 billion in client deposits, has suspended withdrawals. The firm has also hired lawyers to restructure its liabilities. Another company that is facing financial difficulties is Three Arrows Capital, the largest crypto hedge fund. However, Ardoino has said that the Tether crypto currency has no exposure to Three Arrows Capital.

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    Amber Heard

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