Whetheryou believe the current state of the crypto market is an ominous sign of the
end of the world, or if you are simply looking for a fun way to spend your
money, there are a few things you should keep in mind before you decide to
invest in cryptocurrencies. 

Coincheck suffered a gigantic hack in January 2018

Earlierthis year, Japan's largest digital currency exchange, Coincheck, was hit by a
massive hack. A malicious script was allegedly used to infiltrate the company's
servers, and 500 million NEM (XEM) coins were stolen. The hack, which took
place on January 26, raised questions about the security of cryptocurrencies. 

Duringthe attack, Coincheck restricted withdrawals and trading of most
cryptocurrencies. It also blacklisted a wallet that hosted stolen XEM. It is
unclear what caused the hack. However, authorities in Japan say they are
targeting individuals involved in the hack. 

Thehack prompted the Japanese government to take administrative measures against
Coincheck. It also asked all exchanges to report their cybersecurity defences. 

Thehack was described as a "catastrophic security lapse" by Coincheck
executives. They said that the stolen coins were kept in a "hot
wallet," which is an online storage method that is vulnerable to
cyberattacks. 

Inaddition to halting trading, Coincheck has also frozen withdrawals of a dozen
different types of cryptocurrencies. This includes bitcoin, ethereum, NEM, SNX,
WETH, WBTC, and LINK. The company has not yet explained where the stolen funds
come from, though it has not yet said how long it will take to recover the
money. 

Areport released by a Tokyo-based organization revealed that Coincheck was the
target of spear phishing attacks. In addition, hackers used a virus that
enabled them to remotely control computers. 

Thecompany is working with Japan's Financial Services Agency (FSA), which is
investigating the hack. The agency urged Coincheck to bolster security measures
and improve its business operations. It also indicated that it may file
administrative penalties against the exchange. 

Thehack is the largest in history. It has prompted questions about the security of
the blockchain. 

Terra/Luna crash set off momentum for the crypto market down turn

Despitebillions of dollars of effort to save it, the Terra/Luna crash set off momentum
for a flurry of major price drops in the crypto market. This crash shed light
on the risks associated with algorithmic stablecoins. 

Terra'smoney machine collapsed nearly entirely on Wednesday. A massive drain of US$3
billion from the primary hub of UST contributed to the sell off of the Terra
ecosystem. While this is a good example of how an algorithmic stablecoin can be
more capital efficient than a traditional stablecoin, it is also indicative of
systemic risks associated with algorithmic stablecoins. 

TheAnchor lending protocol was the Achilles heel of Terra's money machine. It
required $450 million in reserves to guarantee high staking rewards. However,
critics questioned whether the protocol was set up properly and suggested that
its yield rates could have been lowered. 

WhileTerra was not the first to suffer a collapse, it was the largest of its kind to
date. Its algorithmic stablecoins, UST and LUNA, were the holy grail of the
crypto world. 

However,it is unclear what caused the two major crypto crashes. Some academics
suggested that the fundamental design of a currency may have been flawed and
that there was a "concerted attack" by wealthy investors to short the
cryptocurrency. Others pointed to a range of technical and macro-economic
factors that contributed to the price crash. 

TheUST stablecoin is in sub-dollar doldrums for the third day in a row. However,
its market cap is not large enough to cause permanent damage to the wider
cryptocurrency market. 

Terra'stoken will be distributed to a handful of staking rewards, network security
incentives, and emergency runway for Terra dapp developers. It will also serve
as a token that will align devs with long term success of the ecosystem. 

COVID-19 pandemic

Variousstudies have been done on the COVID-19 pandemic. One study has produced a
global composite index to gauge the COVID-19 crisis's impact on the global
economy. It measures time-variant movements on each day during the COVID-19
pandemic. 

Thestudy also examines the behavior of the cryptocurrencies during the COVID-19
pandemic. The results show that there are a number of positive and negative
relationships between cryptocurrencies. But the magnitude of these
relationships varies widely. This is because there is a strong relationship between
risk and return in financial markets. 

Thestudy also found that a significant number of cryptocurrencies have
significantly decreased in their correlation coefficients since the
post-COVID-19 period. A majority of pairs have correlation coefficients between
0.31 and 0.72. 

Thestudy also found that the S&P 500 has a significant influence on the crypto
market. However, the influence varies slightly across quartiles. In general,
the coefficients are positive in most cases, although they are statistically
insignificant at the extreme ends of the tail. The study's quantile regressions
confirm these findings, showing that the S&P 500's influence on the crypto
market is particularly strong at the lower quartile. 

Thestudy also found that the COVID-19 crisis has had a positive impact on the
efficiency of the crypto market. This was shown in the co-movement effect
between cryptocurrencies. The study used a GARCH model and Python package. It
also examined the impact of COVID-19 on the cryptocurrency market's information
sharing. 

Thestudy also found that a number of decentralized finance applications run on the
Ethereum network. These applications allow people to earn interest and to lend
money. They are decentralized and implant financial functions in digital ledgers. 

Federal Reserve rate hikes

Despitethe recent crash in the price of the world's largest cryptocurrency, Fed rate
hikes have had a positive effect on the market. The Fed has increased the
benchmark interest rate by three-quarters of a percentage point in the last
four meetings. It has also increased the overnight policy rate, the rate at
which banks borrow from the Fed, by one-quarter of a percentage point. 

TheFed's rate hikes are intended to keep inflation from getting out of hand. They
have slowed inflation in recent months, but the inflation rate is still above
the Fed's target of two percent. 

However,the Fed is still expected to continue raising interest rates in the near
future. They have a target federal funds rate of 3.0% to 3.25% and are expected
to increase it to a peak of 4.26% in March of 2023. 

TheFed's aggressive rate hikes have led investors to look for safe havens. This
has affected a number of other investments in 2022, including stocks and
commodities. 

Tradersare watching the Fed's decision closely. The Federal Open Market Committee will
decide whether to continue raising rates or slow down the pace of hikes at
their next meeting. In the short term, volatility is expected. However, in the
longer term, it is likely that the markets will have to re-adjust to the more
aggressive rate hikes. 

Onthe other hand, the Fed's aggressive monetary policy has caused investors to
seek safety in the crypto market. Crypto proponents have portrayed digital
currencies as a hedge against inflation. 

TheFed's decision to increase rates caused an equity rally, but investors worry
that the aggressive monetary tightening measures will cause the United States
to enter a recession. 

Crypto market crashed in 2020

Until2020, the crypto market was in a bearish trend. When the Meta hype cycle ended,
the market experienced a pullback. Many investors followed the trend and sold
popular cryptocurrencies. This led to a more stable market. 

Butnow, the crypto market is in a red zone. It has fallen from its November peak
to just over one-third of its value. The total market capitalization is now
under $1.3 trillion. It is at its lowest point since December of 2020. 

Cryptomarkets are a complex mix of cycles. Corrections can be triggered by minor
events or technical factors. When a market gets depleted of trading volume,
buyers run into strong resistance. That can be an indication of a crash. 

Thecrash began when China announced a crackdown on virtual currencies. A large
amount of capital from unleveraged retail investors and hedge funds poured into
virtual currencies. These companies have also been hit hard this year. 

Techstocks have also been affected. Global Inc and BlockFi laid off thousands of
employees. The S&P 500 has declined by about 20 percent this year. 

Thereis a correlation between crypto prices and the stock market. The correlation is
0.50. 

Thecrypto market is a very volatile market. If you are investing, make sure you
have a solid budget. Also, feel confident in your savings. 

Thecrypto market has swung from one extreme to the other within a day. It can go
from a high of $3 trillion to a low of $781 billion. This can happen in less
than six months. 

Thereare many questions about the crypto market crash. One of the biggest questions
is: will the crypto market crash again? crypto market