During the month of May, the fall in the price of cryptocurrencies occupied the information and technological and market coverage. The drastic decline in the price of bitcoin from May 15 to May 20 was caused by the destabilization of Terra (LUNA), caused by the UST stablecoinpegged to the US dollar.
It all happened when, at the beginning of May, there was a major exchange of UST for USDC, another stablecoin that was also combined with the US dollar. The market, which is high risk, suffered the fall due to the fear of investors who liquidated everything they had in LUNA to buy other currencies. Like any other cryptocurrency, it depends on the movement of supply and demand. Therefore, its value plummeted 99% in just 72 hours.
According to Fabiano Nagamatsu, co-founder of Osten Moove and business mentor at InovAtiva Brasil, this movement greatly damaged the image of those who invest and work with cryptocurrencies because it also destabilized the value of all the others, generating great discomfort among investors. But in fact it basically happened due to lack of experience most of the people who are investing in the crypto market.
“It is an environment full of uncertainties and risks. However, due to the ease of investing, it also includes many amateurs. This type of investor has not yet mastered the techniques of good financial operations and analysis of sustainable business models. When a downtrend starts, you panic and sell your assets“, said.
The expert points out that this is the worst mistake an investor can make: “on the negative side, you buy; it is only sold at the top, without analyzing the ecosystem of other cryptocurrencies“Another point that shows the error of inexperienced investors is, without a doubt, not delving into the narrative analysis. Proof of this is that LUNA is already beginning to recover, because good investors have begun to acquire the asset at its very low price.
“Regardless of this week’s fall, which was not the first in history nor will it be the last, the secondary market is still active after the great movement of cryptocurrencies, which already advances to more than 15 thousand. Thus, the traditional financial market has been concerned with speed, both in terms of facilities and advantages of the new competition, and initiating highly technological changes to serve the consumer.”, he added.
Nagamatsu also points out that today physical money has become less and less relevant. The means of payment by approximation and facial biometrics even dispense with the production of plastic cards, which is a trend that can even help with the issue of sustainability. “More than that: the technology of inserting a microchip into the skin to carry out these transactions is already available. Futuristic movie thing? Nothing of that. They will have to invest more in creativity”.
Then he added: “Following the public interest, there are now companies that pay salaries directly in cryptocurrencies. Thus eliminating the need to make the exchange for each financial transaction. In addition, there are already businesses that accept cryptocurrencies for the sale of their products. The security of the blockchain makes this type of operation possible”.
More and more you hear the question “do you accept cryptocurrencies?” in the negotiations of purchase and sale in Brazil. Because with each passing day, more and more people are interested in investing their capital in cryptocurrencies and decentralizing their purchasing power. For Nagamatsu, along with interest, these investors need to educate themselves on how to behave in the environment in which they operate.
“Otherwise, the fact of being able to invest your money free from the interference of geopolitical issues does not mean more security, but quite the opposite. It is necessary to understand that cryptocurrencies are something serious and treat them as such”, he concluded.
Disclaimer: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information set forth herein should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
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