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Cryptocurrencies Are Crashing As Terra And Luna Plunge, And It’s Causing Investors To Worry

Some investors fear losing their life savings as Cryptocurrencies fall

Cryptocurrencies have taken a massive hit this week, with the wider crypto market dropping by more than 50 per cent since November.  

Bitcoin plunged below USD$25,500 this week, drastically lower than the record high USD$69,000 it reached in November.   

Crypto traders have been offloading their riskier, speculative assets like crypto, tech stock and shares in companies that are still in their ‘growth’ phase and are not seeing any returns.   

It comes as the US Federal Reserve (and central banks globally) hike interest rates aggressively and remove trillions of dollars worth of COVID-19 stimulus in a desperate bid to keep a lid on decades-high inflation.  

"The collapse of TerraUSD has started what we used to call 'the panics', when major financial institutions sold off large chunks of assets and everyone else tried to take their money out as quickly as they could," economist Frances Coppola said.  

"Panic is exactly what's going on here."  

On Wednesday, Do Kwon, the founder of Terraform Labs, the company behind TerraUSD and Terra Luna, tweeted: "I understand the last 72 hours have been extremely tough on all of you - know that I am resolved to work with every one of you to weather this crisis and we will build our way out of this."