of a widely used stablecoin rock confidence in the fast-growing yet largely unregulated ecosystem.
Over time, the theory emerged that bitcoin would be a handy hedge against inflation, thanks to its 21 million supply cap which creates scarcity as demand increases.Bloomberg “Crypto markets have mostly stabilised, modulo whatever happens in traditional markets,” Mr Bankman-Fried toldat the weekend, referring to a maths operation called “modulo” which illustrates the relationship between two numbers.“So if stocks recover, I would expect similar in crypto. If stocks keep crashing, so might BTC.”The threat of a US-based recession has stock investors also bracing for a prolonged period of volatility.
“On the other hand, the worst-case scenario in the short run is that the Nasdaq finds a base, and crypto keeps going lower.”Over the past 10 years, there have been two main crashes that resulted in what are known as “crypto winters”. Last week, the collapse of the third most widely used stablecoin, terraUSD, prompted a dramatic rerating of crypto prices and signalled the start of a period where the inherent technical risks within crypto investments are more considered.