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Crypto crash: almost $1 trillion wiped off markets as Bitcoin hits lowest level since 2020:
It's been a nightmare week for cryptocurrency holders as the market crashes and Bitcoin hits its lowest price since December 2020. Ethereum, BNB, XRP, and many other digital coins have also fallen to their lowest levels in a long time. The crisis came after stablecoin Terra, designed to trade 1:1 with the US dollar, collapsed.
TerraUSD (UST), the 11th largest cryptocurrency by market cap, is an algorithmic stablecoin that uses a set of smart contracts to ensure its value stays as close to $1 as possible. But after hovering at around $1 for about a year, it crashed to 29 cents yesterday, plunging its market cap from more than $45 billion to less than $5 billion. It has since rallied to 62 cents, but that's still far from $1.
Terra's support coin, Luna, has also plummeted in dramatic style, going from $86 at the start of the week to its current price of 20 cents. Terra is designed so traders can exchange 1 UST for $1 worth of Luna, no matter the price of UST
[...] Do Kwon, co-founder of Terra developer Terraform Labs, tweeted: "I understand the last 72 hours have been extremely tough on all of you - know that I am resolved to work with every one of you to weather this crisis, and we will build our way out of this."
Terra's collapse has impacted many cryptocurrencies, the most notable being the biggest one of all: Bitcoin. At the time of writing, BTC is at $27,236, its lowest value since before the crypto boom at the end of 2020. Bitcoin has now lost nearly two-thirds of its value since peaking at $69,000 in November 2021.
[...] The good news for non-crypto-owning gamers is that the freefall will doubtlessly make mining less profitable, and should push graphics card prices even closer to MSRP.
(Score: 0) by Anonymous Coward on Sunday May 15 2022, @04:26PM (1 child)
Fiat currency is debt, not money.
Money doesn't come with interest attached.
(Score: 1, Informative) by Anonymous Coward on Monday May 16 2022, @11:44AM
Back to Economics 101 with you?
Money, or more commonly called Cash == Asset, which most people earn as a thing called Income.
Debt is not cash. You can get cash in exchange for debt. And imagine, that is even true for governments. The only possible area where you are correct, is if you talk about deposit accounts for a bank. A deposit account is considered a liability for the institution since it has to pay back when you withdraw your asset. But that is stretching it.
As for interest, that has little to do with money (ie. CURRENCY) itself. It has mostly to do with risk and ability to get liquidity now and not later. But anyway, this is probably over your head at this point since I'm probably talking to the echo chamber person believing things about "fiat currency".
Anyway, the purpose of FIAT CURRENCY is to facilitate TRADE. The supply of this money is regulated to reflect the state of the economy. It is not the purpose of FIAT CURRENCY to be a STORE OF VALUE over long periods of time. And as we see now, BTC and related are definitely not either ;)