The recent crypto crash was possibly triggered by a financial “attack” on stablecoin Terra. Its partner coin, Luna, subsequently collapsed. UST cryptonews bitcoin
If you had invested £100 in the cryptocurrency Luna a month ago, you might have been quietly confident you’d made a sensible bet. But Luna’s value has since fallen drastically – at the time of writing, that £100 is worth around 4p . Some have recovered to a certain extent, but this still represents an aggregate seven-day loss of over US$500 million , prompting existential questions about the future of the market.
Notwithstanding historical price volatility, there is a basic assumption often seen in investor behaviour: that the asset price will increase, and will keep on doing so. In this scenario the investor doesn’t want to miss out. They see the asset rising, consider it a “sure thing” and then invest. Frequently buoyed by initial successes, the investor may then put in more. Combine this with social media and the fear of missing out on “inevitable” gains, and the investments continue.