Crypto investors had little to celebrate in May, with the prices of the vast majority of digital assets finishing the month well into the red.
When all was said and done, the market cap of the combined crypto market fell 28% in May.
What went wrong for crypto prices in May?
Investors were hit on several fronts in the month just past.
The biggest drag on crypto prices was rising interest rates from some of the world’s leading central banks.
Market watchers were particularly focused on the US Fed, which boosted the target cash rate by 0.5%. With inflation running hot, the Fed, and here at home the RBA, have flagged a series of additional rate hikes ahead in 2022.
This year has seen digital assets track closely in line with risk assets, like the tech-heavy Nasdaq. While the Nasdaq bounced towards the end of the month, it was down 9% by market close on 24 May.
Most crypto prices were down significantly more, in part due to another big tailwind that surprised investors in May. Namely, the collapse of leading stablecoin – TerraUSD (CRYPTO: UST).
On 12 May, Terra’s UST token lost its peg to the US dollar, eventually falling all the way down to a value of just 10 US cents. Terra (CRYPTO: LUNA) – the token intended to help UST maintain its US$1 peg – lost more than 99% of its value.
News of the collapse roiled the crypto community and saw almost every top crypto sell off.
How did some of the top tokens perform in May?
Size was no comfort for crypto investors in May, with the biggest tokens and most popular names falling heavily during the month.
Only a handful of crypto prices managed to finish May even slightly in the green.
Among those, Tron (CRYPTO: TRX) stood out as the clear leader.
Tron, CoinMarketCap tells us, is “a decentralized blockchain-based operating system developed by the Tron Foundation and launched in 2017”.
Depending on your time zone, Tron commenced May trading at 6.8 US cents and finished the month at 8.1 US cents, up 19%.
At the current price of 8.3 US cents, Tron ranks as number 13, with a market cap of US$7.7 billion.