Bitcoin trades below $30,000 as markets digest TerraUSD fallout
Bitcoin staged a modest recovery, extending a period of relative market calm after the collapse of a closely watched stablecoin roiled digital assets in the past week.
Jirapong Manustrong/Getty Images
Bitcoin staged a modest recovery to trade just below
$30,000, extending a period of relative market calm after the collapse of a closely
watched stablecoin roiled digital assets in the past week.
The largest cryptocurrency advanced 1.1% to $29 670 (~R479 531)
at 10:40 am in London. Ether, the second-biggest token, rose 1.9% while coins
like Avalanche and Cardano posted larger gains.
Bitcoin dipped to a low of $25,425 (~R410 922) on Thursday
after the TerraUSD algorithmic stablecoin unraveled, throwing the entire
ecoystem that supports it into disarray. At its height, the market panic
engulfed the $76 billion stablecoin Tether, a key cog in cryptoassets that
briefly dipped from its dollar peg.
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than R3.2-trillion wiped out in 24-hour cryptocurrency bloodbath
“We have witnessed the rapid decline of a major
project, which sent ripples across the industry, but also a new found
resiliency in the market that did not exist during the last market downswing,”
Changpeng Zhao, chief executive officer of crypto exchange Binance Holdings,
tweeted on Sunday.
Even after Sunday’s recovery, the total market value of
cryptocurrencies has dropped by about $350 billion in the past week to roughly
$1.35 trillion, according to data from CoinGecko.
Bitcoin is almost 60% off its November all-time high.
While crypto markets may have digested the worst of the
TerraUSD fallout, the asset class faces other challenges — most notably,
rising global interest rates and tighter liquidity conditions. Federal Reserve
Chair Jerome Powell this week reaffirmed that the central bank will likely
raise interest rates by a half-point at its next two meetings.
“I remain long term bullish, especially on Bitcoin,”
said Vasja Zupan, president of cryptocurrency exchange Matrix. “But I do
foresee high volatility for some time followed by a period of much lower
volumes at lower prices before we can expect trending to new all-time highs.”
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