Why are cryptocurrencies falling?

But the rapid declines this week have been especially acute for investors who bought cryptocurrencies when prices surged last year. The fall in cryptocurrencies is part of a broader pullback from risky assets, spurred by rising interest rates, inflation and economic uncertainty caused by Russia’s invasion of Ukraine.

What happened to cryptocurrencies?

A cryptocurrency that promoted itself as a stable means of exchange collapsed. And more than $ 300 billion was wiped out by a crash in cryptocurrency prices since Monday. The crypto world went into a full meltdown this week in a sell-off that graphically illustrated the risks of the experimental and unregulated digital currencies.

How does cryptocurrency increase in value?

Cryptocurrency increases in value when demand rises higher than supply. Each crypto announces its token minting and burning plans. Some, like the Bitcoin, have a fixed maximum supply; there will only ever be 21 million Bitcoins. Others, like Ether (CRYPTO: ETH), possess no cap on supply.