Investors Cool to Crypto in Wake of Sell-Off

The crypto market is creating victims of many small-scale investors as values keep falling in the aftermath of a severe downturn last week, Reuters reported Tuesday (May 17).

The crypto market has been slumping as investors pull money from riskier assets, due to worries about high inflation and interest rates.

For instance, 25-year-old Nigerian Nofe Isah lost all of her savings in crypto after investing since January. The total lost came out to around $5,000.

“I can’t believe I fell for crypto,” she told Reuters by phone. “I’m just trying not to get myself depressed. Crypto has taken my money, fine. It shouldn’t take my head.”

This came as tokens were seeing losses across the board, with Bitcoin falling to $25,401 on Thursday, the lowest since December 2020. But smaller tokens were hit, too, with ether, the second largest token, dropping 15%, and Luna, a hyped digital coin, losing almost all its value.

Crypto has seen a flood of interest in the past few years. Robinhood, the brokerage platform with 23 million customers overall, has added to the spate of retail investing. About a quarter of its transaction revenues in the last quarter came from crypto, Reuters reported.

However, after the turmoil as of late, online forums have been full of tales like Isah’s, in which retail investors have been expressing anguish.

See also: Tether Drops 9% in $7B Investor Selloff

PYMNTS wrote that Tether, the world’s biggest stablecoin, fell victim to this too, losing 9% of its value and over $7 billion, with investors dropping as the crypto fallout continued.

Stablecoins are usually considered the safer bet compared to crypto, as they’re pegged to the U.S. dollar or other fiat currency.

However, both Tether and USDC broke their $1 value and fell to 95 cents last week.

TerraUSD, or UST, collapsed altogether, and the blockchain has been halted as owners are looking at options. UST is known as Luna on exchanges.