Bitcoin trades below $30,000 as markets digest TerraUSD fallout

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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.


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. 

READ | More
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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