Luna plummets 87% as crypto markets suffer from stablecoin crash

Treasury Secretary Janet Yellen testifies before the Senate Banking, Housing and Urban Affairs Committee hearing on the Financial Stability Oversight Committee’s annual report to Congress on May 10, 2022 in Washington, DC.
photo: Tom Williams (Getty Images)

On Monday, Gizmodo shows you how much money you have today if you invest in various cryptocurrencies six months ago. All of the top cryptocurrencies like Bitcoin and Ethereum fell sharply, except for one standout coin: Terra’s Luna. If you bought a $100 Luna six months ago, you have about $119 worth of Luna on Monday morning. But that all changed in just a few days.

The price of Luna plummeted from $54.36 earlier on Monday to $3.71 at the time of writing. Needless to say, people lost a lot of money in a very short period of time. If you bought $100 of Luna six months ago, the cryptocurrency is currently worth just $7.34. Shit, if you just bought a $100 Luna 24 hours Previously, the cryptocurrency was now only worth $12.67.

But it wasn’t just Luna who experienced an extreme meltdown this week. Over the past 24 hours, Bitcoin is down 5%, Ethereum is down 4.3% and BNB is down 7.7%. Further down the list of popular coins, things got worse, with XRP (Ripple) down 5.8%, Solana down 12% and Cardano down 11.6%. Again, it’s all in one day.

How is this going?On the one hand, stablecoins seems to be crashing. Terra’s stablecoin TerraUSD plunged to $0.69 late Tuesday before rebounding slightly after the Terra Foundation sold a ton of bitcoin. It then fell to a low of $0.31 again this morning and is currently at $0.44. Stablecoins are supposed to remain pegged to a given currency, most commonly the U.S. dollar, but since the “reserve” of these stablecoins is almost always something other than the U.S. dollar, stability is an illusion.

Treasury Secretary Janet Yellen even discussed TerraUSD, developed in South Korea, and the volatility of the stablecoin during her testimony before the Senate Banking Committee. Tuesday.

“I think that simply illustrates that this is a rapidly growing product and that there are risks to financial stability,” Yellen said.

Yellen and Republican Sen. Pat Toomey from Pennsylvania then discussed pushing forward regulations on stablecoins before the end of the year. But it’s still unclear whether regulations would improve stablecoins or simply cause many of them to go out of business and evaporate entirely. Other stablecoins like Tether, the largest in the world, are arguably just a house of cards waiting to collapse when you take a look at the math, as reputable news outlets like Bloomberg News Did it in the last few months.

you don’t, according to Any case, “Have to give it to Luna.” In fact, if you want to carry cash in your pocket in 2022, you probably shouldn’t give it to Bitcoin either.At least 40% of Bitcoin investors are reportedly underwater Yahoo Finance. And it’s not going to get better anytime soon.

Bitcoin enthusiasts will count the cryptocurrency as a hedge against inflation starting in 2022. If you have held U.S. dollars in the past six months, your currency has lost about 7% of its value. But if you hold Bitcoin, your “currency” has lost 52% and is increasing.



Source link