The U.S. Federal Reserve’s monetary policy has taken a toll on the digital asset industry, as observed in the sharp drop in retail activity and space participation.
The risks of investing in the digital currency industry remain high as Fed continues to tighten its policies to counter inflation, while fear spreads among potential investors caused by manipulative platforms.
If a decentralized stablecoin can crash and take billions of digital currency market capitalization due to "fear," it is hard to imagine what a centralized stablecoin crash could do to the industry.
Fed’s monetary policy initiated crazy trends during the last few years. Similarly, metaverse and NFTs gained fame in the last couple of years, with many irrelevant projects attracting big investments.
UST, originally created to withstand up to 91% of the decline in value of LUNA (according to Terra white paper), has now deviated from its core goals of remaining safe and solid.