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TerraUSD meltdown, cryptocurrencies crash

‘루나·테라’ 폭락에 거래 일시 중단…블록체인 폐쇄했다 재가동 + 가상화폐 시총, 하루 258조원 증발…비트코인 2만6천달러 깨져

The cryptocurrency market has seen hundreds of billions of dollars wiped out in the past week.
The market was spooked in the past few days by one pair of coins in particular, developed here in Korea.
A so-called stablecoin that broke its peg against the U.S. dollar, and its sister coin that went to zero.
Our Lee Ji-yoon has more. A major dive in the cryptocurrency market.
More than 2-hundred billion dollars of value was wiped out from the market… in just 24 hours on Thursday.
The hit… started with the collapse of the Terra USD stable coin… pegged to the U.S. dollar.
Its sister token Luna’s price fell by as much as 100 percent on Thursday.
And Terraform Labs… the company behind Terra USD and Luna… decided to halt the its blockchain for two hours… to prevent governance attacks.
So, at this point… we wonder, why have they crashed?

“Terra is a stable coin which means one coin always has to equal one dollar. But unlike other types of stable coins they did not have any assets to back it up. So when both terra and luna started losing their value, terra and luna could not work against each other to try to maintain the value of terra.”

The crash dragged down other cryptocurrencies as well.
Bitcoin plunged by as much as 10 percent on Thursday… to levels not seen since the crypto market began surging in late 2020.
Ethereum also dropped as much as 16 percent.
And this might just be the beginning of more trouble to come.

“Some coins like bitcoin which is not designed as a stable coin was designed to be an inflation hedge. But right now, even those currencies are not acting as an inflation hedge. So I do not think a lot of the weaker coins will survive. Some of the stronger coins may survive, but I don’t think they will reach the highs that we saw a few months or a few years ago.”

Meanwhile, the U.S. Federal Reserve warned earlier this week…. that stablecoins are vulnerable to investor runs and that more federal regulations are needed to guard against such risks.
Lee Ji-yoon, Arirang News.

#cryptocurrency #crash #meltdown

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2022-05-13, 17:00 (KST)

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