The cryptocurrency market is diving and facing a huge downtrend. The prices of top digital tokens are falling constantly. The prices of top cryptocurrencies have seen major changes in the past 48 hours, and new levels of market capitalization have raised serious concerns among investors.

Terra, the digital token, was one of the top growing cryptos, but now Terra and many other tokens have slipped down. Data from CoinMarketCap shows that Terra (LUNA), which was one of the top cryptocurrencies a few days ago, has now dropped to the 59th position in the ranking. It has lost 99% of its value in the last 7 days. Terra's price has dropped by 96 percent in the last 24 hours.

Bitcoin, the world's largest cryptocurrency, has also fallen to a record level in the last 7 days, and this trend of decline doesn't seem to stop in the coming days. According to the Bitcoin history on various cryptocurrency price trackers, the price of bitcoin has dropped by almost 30% in the last 7 days. TerraUSD (UST) has also dropped by more than 30% in the last seven days. At the same time, if we talk about the last 24 hours, the price of UST digital currency has come down by almost 20%.

Be careful

Meanwhile, the co-founder of an online stock trading company has just sent a word of caution to Indian investors from Coinbase Global in a tweet. The company said that Coinbase's revenue in the first quarter of 2022 has been 27 percent lower than last year and the company has incurred a loss of Rs 43 crore. 

The future of Coinbase is at risk, and if it goes bankrupt, the investors will lose their assets. Most investors are in a state of confusion due to the decline in the cryptocurrency market. I am not sure if it's an opportunity to buy or sit back and see what's in store for crypto investors. 

I wonder just what could be the reason for such a huge drop in cryptocurrencies? If I believe what the experts say, efforts are underway to regulate cryptocurrencies around the world. Some countries are neutral and have either declared it as a legal tender, like El Salvador, but I believe El Salvador's move to declare bitcoin a legal tender in the country does not seem to prove beneficial, and people are not paying much attention to transactions in cryptocurrencies.

Market watchers attribute the decline to negative sentiment towards cryptocurrencies by the governments of the countries concerned. Governments all over the world are not in favor of cryptocurrencies because they consider it a red flag against the economy and their internal security. The government of India is taking harsh steps against cryptocurrencies as well. The budget 2022 has a provision for a 30% tax plus a 1% transaction charge on cryptocurrency income in India. That's a big setback for most cryptocurrency traders and investors.

After this, it is now reported that the government may impose a 28-percent tax on cryptocurrencies. The same tax is imposed on casinos, betting, and lotteries. This will be yet another factor that investing money in crypto will no longer be a profitable deal for most investors, and they will sell their assets. This could be another factor the market will go through a further declining trend.