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Crypto markets witness $200B wipeout after bitcoin falls below $26,000
By Yashasvini Razdan - May 12, 2022, 05:06 PM ET
Last Updated - Feb 27, 2024, 01:33 PM EST
The collapse of stablecoin TerraUSD has led to fears of a broader market contagion
The broad cryptocurrency sell-off has erased more than $200 billion from the crypto market.
Bitcoin dropped as low as $25,401.29 on Thursday morning, falling below $27,000 for the first time since December 26, 2020. It pared its losses through the day and rose as high as $29,413.08, down 0.1%.
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Bitcoin’s prices have continued to fall following the broad stock sell-off in the US markets after the Federal Reserve tightened the monetary policy, in its attempt to combat inflation that has risen to an annual rate of 8.3% in April.
The total crypto market value hit $2.2 trillion on April 2, well off of its all-time peak of $2.9 trillion in early November.
Not-so stablecoins
Popular stablecoin TerraUSD fell to less than 30 cents Wednesday, shaking investors’ confidence in the so-called decentralized finance space. It crashed almost 100% at one point in the past week, breaking its $1 peg.
Stablecoins are cryptocurrencies whose value is pegged, or tied, to that of another currency, commodity, or financial instrument, providing an alternative to the high volatility of Bitcoin.
Luna, another Terra token that has a floating price and is meant to absorb UST price shocks, erased 99% of its value and was last worth just 1 cent.
Validators briefly halted the network to implement a patch that would prevent new actors from staking on it. The blockchain was restarted around 1:45 AM ET, reported CoinDesk.
Source - CoinDesk
Picture Credits: How To Geek
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