Bitcoin and other cryptocurrencies fell this week, dropping to levels not seen since the crypto market started to rise in late 2020. The sell-off happened after the stablecoin TerraUSD (UST) broke its link to the U.S. dollar. This wiped out the price of its support coin Luna, which has now lost a large percentage of its value and could drag the cryptocurrency market even lower. It is generally believed that what is happening in crypto is panic, investors being fearful and losing faith
Martha Reyes, the head of research at digital asset broker and exchange Bequant, said in a note “While we can’t call the bottom and correlations among asset classes remain elevated, Bitcoin has survived corrections of 70-80% in the past”. Reyes also said “This may be an opportunity for institutions to build positions at better levels.”
Altcoins, which are smaller forms of cryptocurrency, were also way down. “Memecoins”, called that because they were created as internet jokes at first, not serious blockchain projects, also failed with Dogecoin down 30% and Shiba Inu 34% lower in the past 24 hours.
The collapse of the stablecoin TerraUSD has put more pressure on Bitcoin and Tether, which are in many ways the foundation of the cryptocurrency economy. Cryptocurrency has become a popular way to pay for goods and services, trade, lend money, and do other things based on blockchain technology.