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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: 5, Insightful) by Immerman on Sunday May 15 2022, @07:06PM (4 children)
"This printed paper token we made up is valuable, and will remain so. We the government selling it really, really promise!"
Currency is by it's very nature a social construct with no inherent value. That's the entire *point* of currency - if it has any real value it loses most of its value as a medium of trade. Sometimes in the past it was based on a rare but useless substance like gold - either directly or via government promise, but it's still ultimately nothing but a worthless token that people agree has a poorly defined value determined entirely by what real-value goods people agree it's worth that day.
Generally speaking that's determined by the value of goods and services traded for those tokens, divided by the number of tokens in circulation. And that means it can change on a dime in response to unfolding circumstances. Start making a lot more tokens, and the value of all of them plummets. Lots of people decide they don't trust your tokens and trade using someone else's instead? The value plummets. (a legitimate concern for the US, since most US dollars are circulated by foreign institutions completely outside direct US influence)
Some people like to assign great significance to the government's requiring taxes be paid with a specific token, or guaranteeing it as valid tender for all debts. And that definitely helps a new currency get established, but ultimately is largely irrelevant to its value once established. Taxes are then a tiny portion of the "trade" conducted in those tokens, and we've seen in the past that if then token's value plummets, creditors will go to great lengths to avoid being available for any repayment of debts counted in those tokens until they regain their value.
(Score: 0, Troll) by Anonymous Coward on Sunday May 15 2022, @10:20PM (3 children)
》Taxes are then a tiny portion of the "trade" conducted in those tokens,
The Democrats are working to fix that.
(Score: 0) by Anonymous Coward on Sunday May 15 2022, @10:46PM (2 children)
I didn't know you 1-percenters hang out here.
Just imagine: they might want you to actually pay SOME tax! I know, crazy idea, blast from the past.
(Score: -1, Troll) by Anonymous Coward on Tuesday May 17 2022, @01:53AM (1 child)
Riiight.
Because nobody outside the top 1% of earners could possibly look at the amazing, sterling, magnificent, glorious, stupendous work that the democrats have done with the economy, the national budget and think:
"Holy axle grease, Batman, these chucklefucks have found entire new pooches to screw!"
Oh noes! Narrative derailed! Quick, something-something-fascist-nazi! Say it! Say it now! Or are we back to republican/deplorable/voting-against-own-interests crap?
(Score: 0) by Anonymous Coward on Tuesday May 17 2022, @03:22PM
When did you stop??? Maybe if you weren't busy trying to repeal civil rights and other freedoms then you wouldn't be called deplorable. Maybe if you stopped supporting politicians that tax the poor for hand-outs to the rich then you wouldn't be voting against your own interests. What burns you up is you know it is true, you're not stupid, but you believe the lies from Fox and other rightwing pundits spreading Fear Uncertainty and Doubt. They have you by the balls, well, amygdala!