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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, @11:58PM (5 children)
"With crypto, though ..."
You can almost say the same thing about fiat currency ...
(Score: 0) by Anonymous Coward on Monday May 16 2022, @06:47AM (3 children)
You can say anything about anything. With fiat currency, the value is driven by the fact it's legal tender in some nation. Want a visa to Fooland? You have to pay for it in Foobucks. Want to run a business there? All the licensing requirements and taxes are in Foobucks. Nations use various legal frameworks and yes, coercion to drive a requirement to buy their currencies. You need USD because the USA says so. What entity exists that has a monopoly over something (such as land, and the resources it contains) and insists that you pay with crypto?
(Score: 0) by Anonymous Coward on Monday May 16 2022, @12:14PM
Well, there is El Salvador ... but then they also have USD and they don't make either.
https://www.bloomberg.com/news/articles/2022-05-12/el-salvador-s-bitcoin-losses-are-as-big-as-its-next-bond-payment [bloomberg.com]
(Score: 0) by Anonymous Coward on Monday May 16 2022, @01:39PM (1 child)
"With fiat currency, the value is driven by the fact it's legal tender"
You mean like Venezuela
(Score: 0) by Anonymous Coward on Tuesday May 17 2022, @03:16PM
And? Pointing out that fiat currency can go the way of Bitcoin is not a win.
(Score: 2) by Mykl on Tuesday May 17 2022, @10:52PM
No, you cannot even remotely say this. Fiat currency may not be backed by gold, but there are plenty of government assets (land being only a very small part of it) that can be used to support owners in the event of a problem.