A crypto crash wiped out $1 trillion this week. Here's what happened
New York (CNN Business) — Wild, stomach-churning moments are part of the experience when you buy a ticket to the crypto circus. But the past week's volatility was enough to make some of the crypto faithful wonder whether they've been bamboozled.
On Wednesday, a broad crypto crash wiped out about $1 trillion in market value — a staggering drop from $2.5 trillion just a week ago. Bitcoin, which accounts for more than 40% of the global crypto market, nosedived 30% to $30,000 on Wednesday, its lowest point since January.
By Friday, bitcoin had rebounded slightly, to around $37,000 — bruised by continued regulatory concerns, and far off its all time high above $64,000 that it hit a month ago.
Volatility is baked into the nascent cryptocurrency market, but the digital assets' explosive growth in the past year has attracted hordes of amateur and professional investors looking for a quick profit. Many of them ride an upswing and get out, or panic sell when things turn sour, exacerbating gains or losses. ...
https://www.cnn.com/2021/05/22/investing/crypto-crash-bitcoin-regulation/index.html
Crypto is still small, relatively speaking.
What basically happened is Elon Musk and several other wealthy people and institutions created a fear campaign as a means to drive the price down and it worked.
If you actually dig a little into each claim being made, from power usage to China banning crypto, you will find that the news items being released are essentially full of shit.
It is a short-term event.
Crypto will go back up, especially the ones that provide an actual service, and in a month or two it will return to previous levels and keep increasing.
This type of event happens several times per year, and it is the same story over and over again.
And yet, after multiple drops of 20% to 40% within a one year period going back to the beginning of Bitcoin, crypto almost always holds significantly more value year after year.
Even now, Bitcoin holds more value than the beginning of this year and the returns are still high compared to any other market you want to compare it too.... and that is after several dips of 30% this year.
It is a new market, it is to be expected, but in the coming years, people like Musk and his wealthy, narcissistic mates wont be able to manipulate the crypto market because it will be too big.
And even then, these same people manipulate the NYSE, which is 71 times larger than the crypto market...... but at least the volatility will be vastly reduced.