Why have cryptocurrencies fallen? It’s the end? [Vídeo]

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Cryptocurrencies are not at their best moment in the last two years. The week, specifically on May 12, the main cryptocurrencies fell to levels not seen since 2020. Bitcoin, the cryptocurrency used as a benchmark, broke the $30,000 barrier and stood at an almost forgotten $26,000. The panic reactions have not been long in coming and there is talk of a crisis or even the bursting of the bubble. But is it the end of cryptocurrencies? Let’s take a look at what happened in today’s video.

One of the differences of this collapse in prices has been the case of Luna Terra; a pair of cryptocurrencies, made up of UST, a dollar-pegged stablecoin, and LUNA, a traditional crypto. LUNA has received an immense amount of attention over the last few months, justified in part by its enormous price increase. However, on May 12, LUNA, which was worth $120, collapsed losing almost 100% of its value.

And UST, a currency that was supposed to have a fixed value tied to the dollar, decoupled from the American currency and lost almost all of its value as well. This catastrophe has caused tens of thousands of people to lose absolutely all the money invested in Luna Terra and the shock wave has affected the rest of the cryptos, as has been seen in the price of Bitcoin.

However, for Bitcoin and company this is nothing new. Cryptocurrencies typically face at least one annual price shock. In May 2021, exactly one year ago, Bitcoin, Ethereum and major cryptocurrencies lost about 50% of their value…and months later, in November, they reached all-time highs.

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It is possible that this will not happen again and that indeed, the Luna Terra event marks the beginning of the end of crypto. But digital currencies have shown unprecedented resilience (withstanding crises, wars, fraud…), and if they are a bubble, it is a difficult one to puncture. At least for now. Despite this, it must not be forgotten that prudence and responsibility are mandatory when putting even a single euro into the crypto market.

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