Realizing that it was far from enough, Terra's headlines precipitated a classic bank run. They all tried to dump their Terra simultaneously, driving the price of a coin well below parity of $1. The funds behind Luna tried to bail her out, apparently for a total of $750 million, but to no avail. The Terra sale suddenly and enormously increased Luna's supply just as demand was collapsing. If Luna was meant to stabilize Terra, and Terra could not be saved, what was moon for? The holders also dumped Luna and it lost 99.99% of its value. In a week about $45 billion in market capitalization evaporated. Once Terra and Luna crashed, investors became concerned about other cryptocurrencies.
On May 12, a widespread sale was underway. Tether paid $10 billion in withdrawals; Bitcoin lost 60% of its value. Coinbase laid off 18% of its employees. Celsius Network froze all south africa phone number list withdrawals and transfers for its 1.7 million customers. Layoffs, bankruptcies and freezes continue to this day. Since July 13, Bitcoin has fallen 70% from its high. There is also a structural explanation for why all this is happening. In early May, the Federal Reserve announced a "gigantic" interest rate hike, twice its normal pace, noting that it could raise interest rates seven times through the end of 2022. Rates were raised again to mid-June and end of July.
That surge made borrowing money quite expensive and prompted investors to rebalance their portfolios enough that the steady stream of cheap money flooding the crypto economy slowed down enough to precipitate a crash . The Federal Reserve intends to precipitate a downturn in the real economy, and in a downturn everyone wants dollars, not algorithmic stablecoins or Bored Ape NFTs. Like WeWork, Uber, and other tech companies with absurd market capitalizations and no profits, cryptocurrency is a grim symptom of an unprecedented era of cheap money that has continued since the 2008 crash. Trillions of dollars have poured in everywhere. kind of destructive and stupid things.