crypto contagion

The crypto contagion was a credit crunch that hit the cryptocurrency space in 2022. It mainly affected hedge funds and lending platforms who had borrowed huge sums of money off each other, and when one toppled it had a major impact on the others. The crypto contagion started with the collapse of the Terra ecosystem and then the liquidation of Three Arrows Capital. This led to liquidity problems for several other exchanges and lending platforms, some of whom went under as a result.