May 17, 2022 · less than 3 min read
Could action from Washington pull crypto back from the brink?
Down but not out
Pretty much everyone with a stake in crypto took a big, fat L last week. The huge crash in value reached a new low across the market, with various currencies seeing total implosions and buyers losing huge fortunes.
With interest rates rising, and recessions forecast, the general vibe in the US economy has been one of doom and gloom. Triggered by a less than optimal Q1 for tech firms, and helped along by a few mishaps of its own, crypto prices have fallen through the floor in just the latest volatile explosion in this space. It’s led to calls for the fed to start regulating crypto properly.
The woes of Terra, in particular, are in the spotlight. Its two cryptocurrencies, Luna and UST, were both devastated by the crash and have been left in ruins. Terra now stands effectively worthless.
“What we’re really seeing in the crypto community is a really powerful, real-time proof of why securities laws and banking laws exist,” said Tyler Gellasch, executive director of the Healthy Markets Association. And while Terra won’t have a direct impact on the broader financial system, this episode could well be the catalyst needed for Washington to swoop in with expanded regulations. With eagle eyes watching the Biden administration’s every move though, there doesn’t seem to be an easy fix – and he’s certainly going to ruffle a few feathers with any genuine changes.
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