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Why did cryptocurrencies fall and what could be the way forward

Why did cryptocurrencies fall and what could be the way forward
Written by Arindam

The recent massive drop in the crypto market has raised the question of what exactly are stablecoins. Stablecoins are designed to avoid volatility and are linked to another asset. This fall, the price of Terra’s native token Luna dropped significantly. Tether, a major stablecoin, was also broken off its link with the dollar. This has again brought to the fore the need for regulation in this segment.

If stablecoins are not the only ones, then it is not difficult to predict the security of cryptocurrencies. The recent fall has revealed that just like stock market investors, crypto investors are at risk of drowning their money in these cryptocurrencies. Investors in the stock market expect that the price of their stocks will continue to rise. After getting initial success in the stock market, investors can invest more money. The fear of missing out on the bullishness with the information received on social media keeps investing going.

One of the major reasons for investing in cryptocurrencies is that investors believe that it will give them good returns. However, this confidence has been shaken after the price of the cryptocurrencies broke down due to heavy selling in the past few weeks. Another reason for investing in cryptocurrencies can be the assumption that cryptocurrencies can make a big difference in financial transactions. For investors who believe this, the increase in the value of the cryptocurrency is also a sign of its increasing strength. These investors also include those who can avoid selling even if there is a big fall. This segment of investors can be a big hope for this segment.

We can better understand their behavior if we group the investors into cryptocurrencies according to the reasons for investing. However, investors can get some respite from the fact that they have probably left the bad phase of this market behind and now it is likely to improve. Investors must keep in mind that unlike any other market, there is no guarantee of anything in crypto.

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Arindam

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