Posted on May 14, 2022
4 things to know as cryptocurrencies such as Bitcoin (and stablecoins) melt down
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https://www.npr.org/2022/05/14/ [login to see] /4-things-to-know-cryptocurrencies-bitcoin-stablecoins-terrausd
As the old maxim goes, sometimes the bigger they are the harder they fall.
Bitcoin and other cryptocurrencies surged during the pandemic, turning many amateur investors into millionaires, on paper at least. Bitcoin, for example hit to an all-time of nearly $68,000 in November.
Today, it's trading at less than half that amount as part of an intense sell-off that has accelerated in recent weeks.
It's been even worse for an area of cryptocurrencies called stablecoins, in particular one called TerraUSD that has tumbled hard.
Here's a look at what's going on.
As the old maxim goes, sometimes the bigger they are the harder they fall.
Bitcoin and other cryptocurrencies surged during the pandemic, turning many amateur investors into millionaires, on paper at least. Bitcoin, for example hit to an all-time of nearly $68,000 in November.
Today, it's trading at less than half that amount as part of an intense sell-off that has accelerated in recent weeks.
It's been even worse for an area of cryptocurrencies called stablecoins, in particular one called TerraUSD that has tumbled hard.
Here's a look at what's going on.
4 things to know as cryptocurrencies such as Bitcoin (and stablecoins) melt down
Posted from npr.org
Bitcoin
Investing
Money
Posted 2 y ago
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PO1 William "Chip" Nagel
..."So where do we go from here?
More broadly, the outlook for cryptocurrencies will likely continue to be tied to broader market sentiment.
But the falls in cryptocurrencies and the collapsing value of TerraUSD stand to alarm policymakers such as Treasury Secretary Janet Yellen and Securities and Exchange Commission Chair Gary Gensler.
That may lead to more regulation of cryptocurrencies in general.
Sustained falls in cryptocurrencies could also raise doubts about the future of the virtual money more broadly, just when there had been signs that it was trying to mature, with more and more professional investors starting to trade them.
Last month, Fidelity, the largest provider of retirement plans, announced it would allow employers to offer Bitcoin in 401(k) plans, although the Department of Labor has cautioned employers against doing that.
Still, cryptocurrencies also have a lot of fanatical followers who are used to steep selloffs and reversals, and many of them believe that this is a short-term decline.
Tschosik from Ned Davis Research, for example, is "long-term bullish on Bitcoin," he says. "We still see the acceptance of it continuing to expand."
He points to millennials, for example, who want to invest in cryptocurrencies because they seem as as a "legitimate option."
Not everybody agrees, however, leaving the future of cryptocurrencies uncertain."
..."So where do we go from here?
More broadly, the outlook for cryptocurrencies will likely continue to be tied to broader market sentiment.
But the falls in cryptocurrencies and the collapsing value of TerraUSD stand to alarm policymakers such as Treasury Secretary Janet Yellen and Securities and Exchange Commission Chair Gary Gensler.
That may lead to more regulation of cryptocurrencies in general.
Sustained falls in cryptocurrencies could also raise doubts about the future of the virtual money more broadly, just when there had been signs that it was trying to mature, with more and more professional investors starting to trade them.
Last month, Fidelity, the largest provider of retirement plans, announced it would allow employers to offer Bitcoin in 401(k) plans, although the Department of Labor has cautioned employers against doing that.
Still, cryptocurrencies also have a lot of fanatical followers who are used to steep selloffs and reversals, and many of them believe that this is a short-term decline.
Tschosik from Ned Davis Research, for example, is "long-term bullish on Bitcoin," he says. "We still see the acceptance of it continuing to expand."
He points to millennials, for example, who want to invest in cryptocurrencies because they seem as as a "legitimate option."
Not everybody agrees, however, leaving the future of cryptocurrencies uncertain."
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