Why is crypto crashing? A common question that is ravaging the mind of millions of investors

Why is crypto falling? An obvious question in 2022 that is enquired by most investors as cryptocurrency prices constantly declining this year. The small surges in crypto prices did little to boost profits and revenues for the investors, besides, the constant weighing down of the market by the bankruptcy filings of various blockchain and crypto companies, multiple scandals, and unexpected market volatility have left large holes in investors' balance sheets, who have fled the market or are planning on it. Basically, investor sentiments play a massive role in the escalating values of riskier assets like cryptocurrencies. However, the current uncertainty in the market is clearly translating into lowering investor interest in buying new cryptocurrencies. As a snowball effect, crypto trading volumes decreased and so did the global crypto market cap. Now investors are speculating about the market's conditions in 2023 and why is crypto falling constantly even after portraying multiple signs of growth over the past couple of weeks.

Series of Major Events that Led to the Downfall of the Crypto Market

Currently, FTX's blow is one of the biggest mishaps that the market is still facing. The demise of one of the largest crypto exchanges in the world caused a contagion impact on cryptocurrencies as several other exchanges and crypto lending platforms that were linked to the FTX platform continued to file for bankruptcy. In addition to this, major cryptocurrencies like BTC and ETH saw massive declines in their values. Moreover, the news about the FTX Exploiter who was selling large amounts of Ethereum into Bitcoin also spooked investors.

Prior to this, the implosion of the entire Terra ecosystem also caused massive panic in the market. Terra's fall was the first significant blow that Bitcoin and Ethereum faced after a prolonged slumber since Q4 of 2021. Moreover, increased regulations in the decentralized market persistently affected the prices of cryptocurrencies. It is needless to mention that cryptocurrencies and regulators have a long history of not getting along effectively due to certain misconceptions that continue to rise and mistrust in government organizations. The lack of clarity in regulations also constricts growth and innovation in the industry, which is why investors started relying more on assets that will yield creativity and profits.

So, How Did BTC and ETH Get Affected by These Instances?

Being the two largest cryptocurrencies in the market has its perks, but they also have drawbacks. Bitcoin and Ethereum basically absorb the shocks that come with the mishaps in the market. Earlier, while investors speculated as to why is crypto crashing, the evidence was Bitcoin's price movements. Currently, while writing this article, the Bitcoin price is revolving around the US$17k mark and Ethereum is hovering over US$1.3k. This indicates that the two cryptocurrencies have lost almost 65%-70% of their values in 2022, from their respective all-time high of US$69k and US$4k in 2021.

There are several reasons why BTC and ETH are constantly rejecting their prime resistances. Majorly for the speculation and manipulation of various crypto assets to avoid further financial losses. This scenario gets intensified when the whales sell off their holdings and make the market plunge by selling off significant portions of their assets. Currently, if you are looking to invest in cryptocurrency assets, analyze the market minutely and definitely avail the advice of financial experts.