More than $200 billion erased from entire crypto market in a day

[superadmin]

More than $200 billion erased from entire crypto market in a day as sell-off intensifies

• The price of bitcoin plunged below $26,000 on Thursday, hitting its lowest level in 16 months.
  
• Ether, the second-biggest digital currency, tanked below $2,000 per coin.
  
• The collapse of stablecoin terraUSD has led to fears of a broader market contagion.
  

Bitcoin fell below $26,000 for the first time in 16 months, amid a broader sell-off in cryptocurrencies that erased more than $200 billion from the entire market in a single day.

The price of bitcoin plunged as low as $25,401.29 on Thursday, according to Coin Metrics. That marks the first time the cryptocurrency has sunk below the $27,000 level since Dec. 26, 2020.

Bitcoin has since pared its losses and was last trading at $28,569.25, down 2.9%.

Ether, the second-biggest digital currency, tanked to as low as $1,704.05 per coin. It’s the first time the token has fallen beneath the $2,000 mark since June 2021. Ether was last down 8.8% at a price of $1,937.88.

Investors are fleeing from cryptocurrencies at a time when stock markets have plunged from the highs of the coronavirus pandemic on fears over soaring prices and a deteriorating economic outlook. U.S. inflation data out Wednesday showed prices for goods and services jumping 8.3% in April, higher than expected by analysts and close to the highest level in 40 years.

- More -

[superadmin]

Regulators are growing anxious about stablecoins after Terra’s stunning collapse

• TerraUSD, an “algorithmic” stablecoin that’s meant to be pegged one-to-one with the dollar, plunged below $1 this week.
  
• Tether, the world’s biggest stablecoin, also temporarily “broke the buck” on Thursday.
  
• U.S. Treasury Secretary Janet Yellen has urged Congress to approve federal regulation of stablecoins.
  

Regulators are getting increasingly worried about stablecoins after the collapse of controversial cryptocurrency venture Terra.

TerraUSD, an “algorithmic” stablecoin that’s meant to be pegged one-to-one with the U.S. dollar, has erased much of its value this week after a stunning run on the bank that saw billions of dollars suddenly evaporate from its market value.

Also known as UST, the cryptocurrency operated using a complex mechanism of code combined with a floating token called luna to balance supply and demand and stabilize prices, as well as a multibillion-dollar pile of bitcoin.

Tether, the world’s biggest stablecoin, also slipped below its intended $1 for several hours on Thursday, fueling fears of a possible contagion from the fallout of UST de-pegging. Unlike UST, tether is supposed to be backed by sufficient assets held in a reserve.

- More -