The sell-off wiped over US$200 billion off the cryptocurrency market in just 24 hours, Bloomberg reports, citing estimates from price-tracking website CoinMarketCap.
The sell-off has taken the combined market value of all cryptocurrencies to US$1.12 trillion, around a third of where it was last November, Reuters reports, citing data from CoinMarketCap, with more than 35 per cent of that loss coming this week.Article contentPanic spread from a meltdown this week in stablecoin TerraUSD, known as “UST”, when it slipped below its 1:1 peg to the dollar.
Stablecoins are digital tokens pegged to the value of traditional assets, like the U.S. dollar. Because of this they are favoured in crypto markets in times of turmoil.Article content Tether, a major stablecoin, slipped below its dollar peg, hitting as low as 98 cents early Thursday, according to CoinGecko. USD Coin was trading at around US$1.04 while Binance USD was at US$1.07 – a significant breakout of its usual range, said Reuters.
As both stock markets and crypto markets fell Thursday, traders cited chaos in the crypto market as a focal point for concern, Bloomberg reports. Strategists worry that small traders, who lost a lot in the meme stock craze, will be wiped out with these crypto losses and sell everything else.
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