An op-ed article published in the state-backed Chinese publication Economic Daily, has suggested that the recent crash of the Terra blockchain’s LUNA and the de-pegging of the UST stablecoin vindicate the Asian country’s decision to ban crypto-related activities. In the article, the author names the interest rate hikes by the U.S. Federal Reserve and the buying and selling of crypto assets by several investment giants as the causes of the recent market crash.
An author writing for China’s state-backed publication, Economic Daily, has argued that the recent crash of Terra’s LUNA and the de-pegging of the UST stablecoin vindicates his country’s decision to block or prohibit virtual currency-related activities. The author, Li Hualin, also claimed that China’s “decisive” and “timely” action helped to “extinguish the ‘virtual fire’ of virtual currency speculation and put ‘protection locks’ on investors’ wallets.”
Since the beginning of this year, the Federal Reserve has launched an interest rate hike cycle, and global liquidity has tightened. Especially in early May, the Federal Reserve raised interest rates by 50 basis points at a time, which had a negative impact on capital and market sentiment, and virtual currencies were the first to bear the brunt.
The Chinese author, in the meantime, claims in the piece that the involvement of investment giants in crypto markets “can lead to violent fluctuations in currency values, triggering a large number of sell-offs.”
The author ends the article by urging investors to “remain rational, promptly eliminate the greed of bottom-hunting and get rich overnight, and stay away from related trading speculations, otherwise it is very likely that ‘currency will go to the fortune.’”
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