More than $200 billion erased from entire crypto market in a single day as sell-off intensifies.
Bitcoin fell below $26,000 for the first time in 16 months, amid a broader sell-off in cryptocurrencies that erased more than $200 billion from the entire market in a single day.
Ethereum and its biggest rivals BNB, solana, cardano, and avalanche had fallen even more steeply, each losing between 15% and 20%. Ripple’s XRP is also down around 15%.
Ether, the second-biggest digital currency, tanked to as low as $1,704.05 per coin. It’s the first time the token has fallen beneath the $2,000 mark since June 2021.
The brutal bitcoin and crypto price crash was triggered first by the U.S. Federal Reserve sharply hiking interest rates last week, also crashing stock markets, and then exacerbated by the fast-growing algorithmic stablecoin TerraUSD (UST) struggle to maintain its $1 USD peg and eventual collapse.
Investors are fleeing from cryptocurrencies at a time when stock markets have plunged from the highs of the coronavirus pandemic on fears over soaring prices and a deteriorating economic outlook. U.S. inflation data out Wednesday showed prices for goods and services jumping 8.3% in April, higher than expected by analysts and close to the highest level in 40 years.
Will Washington act? Treasury Secretary Janet Yellen called for stablecoin rules, citing the Terra meltdown. And some industry insiders agree. “What’s happened with UST isn’t surprising and lends a sense of urgency for Congress to act decisively to set clear rules of the road for stablecoin issuers,” Jeremy Allaire, a founder and C.E.O. of Circle, which issues a reserves-backed stablecoin, told DealBook.