Cryptocurrencies took another hammering, with TerraUSD’s collapse yesterday causing an “industry-based panic”.
Bitcoin nosedived another 14%, changing hands at US$27,039, its lowest level since the end of 2020.
Ethereum, on the other hand, has lost nearly a quarter of its value in the last 24 hours, down 23% to US$1,824, its lowest price since March last year.
According to Ipek Ozkardeskaya, yesterday’s unpegging of the Terra stable coins is causing “an industry-based panic”.
“The Terra-USD peg is mostly based on the belief that one could always exchange Luna to guarantee a $1 peg for Terra.”
“But apparently that belief is not working anymore, and trust is a foremost ingredient in cryptocurrencies' success.”
“So, you bet, the level of stress in other cryptocurrencies is mounting.”
“Terra’s sister coin Luna lost 94%, as Bitcoin plunged below the US$30,000 mark yesterday.”
“It wasn’t only Terra’s fault; disappointing US inflation data also encouraged the selloff in Bitcoin.”
Ozkardeskaya added that the latest crash has seen the US Treasury Secretary Janet Yellen push for more regulation in the crypto world.
“But, what the crypto industry needs right now is a returning trust, and enthusiasm regarding how the digital tokens would fit into our increasingly digitized lives, rather than government regulation.”
In some of the altcoins, Solana was down 35% to US$42.01, Cardano was down 33% to US$0.4181 and Dogecoin fell 30% to US$0.07449.