Like Bitcoin and Ether, Coinbase hit an all-time high in November. crypto exchange’s stock has been tumbling for months now, a decline that closely mirrors the crypto market’s. Some 97% of that came on Thursday alone, when the Terra network that both Luna and UST exist on was halted for nearly two hours. A week ago, Luna tokens were going for as much as $87 in the open market, making its 99.97% seven-day decline the worst of any crypto tracked by CoinMarketCap. Luna, the sister crypto, has plunged to just 3 cents as a result. (It was trading around 40 cents, as of Thursday afternoon.) And what happened to Luna crypto? And on Wednesday, UST fell below 30 cents. On Monday, it dropped down to the 70-cents range. And since then, UST hasn’t been able to recover. The not-so-stable stablecoin’s decline is believed to have begun as UST deposits dropped on Anchor, a Terra-based decentralized finance protocol that has long been a source of concern for UST skeptics, Fortune‘s Locke has reported. Just an algorithm that hinges on traders burning or creating tokens-whether it be in UST or its sister crypto, Luna-to keep the price of UST around $1, as Quiroz-Gutierrez reported in April. UST is what’s known as an algorithmic stablecoin, though, meaning there are no assets backing it. So, to do that, most stablecoins like the two largest, Tether and USDC, purport to be backed by an equal dollar amount of assets-typically cash, bonds, and some other mix. The idea, as the name implies, is to offer investors a safe haven in the wild, gyrating world of crypto with a digital asset that is typically pegged to some sort of benchmark, like, in the case of UST, $1. What is UST crypto?Ĭreated by the Do Kwon-led Terraform Labs, UST is a breed of crypto known as a stablecoin. Perhaps exacerbating Bitcoin’s decline, though, was the collapse of a purported stablecoin known as TerraUSD, or UST for short. “Stock market indices and crypto moved in sync, yet again.” “This week markets took a sudden U-turn following the Federal Reserve’s meeting,” Lucas Outumuro, head of research at IntoTheBlock, wrote in a newsletter last week, as Locke reported.
So, when the Fed indicated May 4 that it would raise rates by half a percentage point, Bitcoin began to sink. The latest to reach the conclusion was analysts at Bank of America, according to Fortune‘s Taylor Locke. And while Bitcoin has long been touted by its supporters as the ideal inflation hedge, it’s far from one today, as myself, Fortune‘s Shawn Tully, Quiroz-Gutierrez, and others have all reported before. that has caused the Federal Reserve to drop the idea that higher prices are “transitory” and start hiking interest rates. There’s no one reason, per se, behind why the original crypto is now trading at its lowest level since December 2020, as Fortune‘s Marco Quiroz-Gutierrez recently reported.īitcoin, like other risk assets such as technology stocks, special purpose acquisition companies, and newly public stocks, have all struggled for months now in the face of soaring inflation in the U.S. By comparison, the global value of crypto markets in the now-infamous 2018 crypto winter dropped by about 70%. Zoom back far enough, and you’ll see that the total value of global crypto markets today is still up 789% from March 2020 when crypto began to its latest rip higher. Investment gains and losses are all a matter of perspective, though. And the original meme token, Dogecoin, has plunged 40%.
Altcoins like Cardano’s ADA, Solana’s SOL, and Polkadot’s DOT are all down more than 45%. Bitcoin is down by a third since May 4, now trading at around $28,000, while Ethereum’s ETH token, the second largest crypto out there today by market capitalization, has dropped 35%.
Of the sell-off, the damage has been widespread. That’s a decline of 33% in a single week. ET, according to data from CoinMarketCap. But the last week has been particularly brutal, with crypto overall plummeting from $1.18 trillion to $1.2 trillion, as of Thursday afternoon at 3 p.m. Since the total value of crypto markets globally hit an all-time high in November 2021, the market has crumbled 59%.
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