The global crypto market has undergone some critical changes, transforming the shape of its future investments. The changes have affected it in value because the impacts are limited to regular currencies as the market depression looms. Instead, the impacts are also evident on the stablecoins, which were little impacted by the ongoing market changes.
The ongoing market depression has emaciated the crypto giants like Bitcoin, Ethereum, Binance Coin, etc. But those in the following range have also not been able to keep themselves safe. The last straw for the crashing market came with the collapse of Terra UST, a stablecoin, which proved to be a source of too much pessimism.
The said situation created a panic in the markets because of the possibility of the collapse of stablecoins. Here is a brief overview of the continuous retreat of the crypto market in the Asian region and how it has impacted the value of cryptocurrency stocks.
The continuous retreat of the global crypto market has continued for more than a couple of weeks. The said period saw the decrease of Bitcoin value from $40K range to $30K, a staggering loss of about $10K. Also, the global market came down to $1.28T, which includes the part of the impact of market depression in the Asian region.
Bloomberg, in a report, tweeted about Asian crypto markets and informed the customers about how the market is in a retreat mood. One of the leading names in Hong Kong related to crypto is BC Technology which saw a rapid decline in shares. Its shares have seen a significant decrease in value over four years as it tumbled 7.5%.
Another victim in the Asian market that has been affected by market depression is Japan-based Monex Group. This group owns CoinCheck and TradeStation, known names in crypto. According to the available updates from Bloomberg, the losses for Monex Group have been up to 8.6%. If the market depression continues, there are chances that the retreat will further impact it.
South Korea-based Woori Technology Investment Co. has also experienced setbacks as its value dropped by 6.6%. The fear of losses for stablecoins has instigated the changes.
Terra’s collapse and the following fallout
Terra’s collapse was one of the most unanticipated events, as there was little speculation about the possibility of any stablecoin. The impacts of the collapse of UST were far-reaching, and Federal Reserve released a statement about it referring to stablecoins as one of the risky assets. The other two included some money market funds and some bond funds. The liquidity risks are still possible due to the market depression continuation.
The one-third decrease in the value of UST has caused an outcry as the customers of the crypto market didn’t expect it to happen. The ongoing situation has created a chaotic situation in Asian markets, a hub known for technological innovation and funding. The most impact has been on the institutional investments because investors want to protect themselves from a sudden decline in the value of their investment.
The nervousness in the Asian markets might continue for a while. Also, there is a possibility of increasing the value of recession for the stocks because of the prevalent fears.
Conclusion
The ongoing market depreciation has introduced some unknown phenomena to the investors. One of these is the collapse of stable coin Terra UST which has had far-reaching impacts. This happening is evident in the Asian markets, where institutional investments have seen a steep decline in value. The situation might continue unchanged unless there is some support for crypto giants. The fears for the depreciation of other stablecoins have created a panicking market situation.
