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Wednesday June 29, 2022

‘Over $200 billion wiped off cryptocurrency market in a day’

By News Desk
May 13, 2022

A massive sell-off in cryptocurrencies wiped over $200 billion of wealth from the market in just 24 hours, according to estimates from price-tracking website CoinMarketCap.

Bitcoin plunged by as much as 10 percent in the last day to its lowest level since December 2020, while Ethereum dropped as much as 16 percent

The broad plunge in the crypto complex, driven by the collapse of the TerraUSD stablecoin, hit major tokens hard. Bitcoin plunged by as much as 10 percent in the last day to its lowest level since December 2020, while Ethereum dropped as much as 16 percent.

The carnage showed signs of spreading further Thursday as crypto-related stocks in Asia also cratered. Hong Kong-listed fintech firm BC Technology Group closed down 6.7 percent. Japan’s Monex Group — which owns the TradeStation and Coincheck marketplaces — ended the day down 10 per cent.

The meltdown in TerraUSD, one of the world's largest stablecoins, sent shockwaves through cryptocurrency markets, pushing another major stablecoin Tether below its dollar peg and sending bitcoin to 16-month lows.

As central banks across the world move to aggressively tighten monetary policy to fight inflation, digital tokens have faced selling pressure amid a broader flight from risk assets. S&P 500 futures lost 0.8 percent Thursday, tracking losses in the benchmark MSCI Asia Pacific Index.

Cryptocurrencies have been swept up in a sell-off across higher risk assets, which has picked up steam this week as data showed U.S. inflation running hot, deepening investor fears about the economic impact of aggressive central bank tightening.

The sell-off has taken the combined market value of all cryptocurrencies to $1.2 trillion, less than half of where it was last November, based on data from CoinMarketCap.

Bitcoin , the largest cryptocurrency by market cap, hit a low of $25,401.05 on Thursday, its lowest level since Dec. 28, 2020, before recovering slightly later in the session to trade flat on the day.

In the past eight sessions it has lost more than a quarter of its value, or around $10,700, and is down 37 percent so far this year, trading far below the peak of $69,000 it hit in November 2021.

Bitcoin's correlation with the Nasdaq composite has been on the rise recently and is now up near its all-time highest level, based on Refinitiv data.

Ether , the world's second-largest cryptocurrency, fell to its lowest since June 2021, sinking as low as $1,700.

Unlike previous financial market sell-offs, when cryptocurrencies have been largely untouched, the selling pressure in these assets this time round has undermined the broader argument that they are dependable stores of value amid market volatility.

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