Crypto world stabilises after rocky week shook stablecoins

Cryptocurrency: Crypto world stabilises after rocky week shook stablecoins – Reuters

HONG KONG/LONDON/NEW YORK (May 14): Cryptocurrencies steadied on Friday (May 13), with Bitcoin recovering from a 16-month low after a volatile week dominated by the collapse in value of TerraUSD, a so-called stablecoin.Crypto assets have been swept up in broad selling of risky investments on worries about high inflation and rising interest rates, but have started showing signs of settling.Although the near-term trajectory of the crypto market is challenging to predict, the worst may be over, said Juan Perez, a

Although the near-term trajectory of the crypto market is challenging to predict, the worst may be over, said Juan Perez, a director of trading at Monex USA in Washington.Although it hit a high of just under US$31,000 on Friday, Bitcoin remained far below week-earlier levels of around US$40,000 and unless there is a huge weekend rally, it is on track for a record seventh consecutive weekly loss.

Ether, the second largest cryptocurrency in terms of market cap, also gained, climbing 6.48% to US$2,051.The crypto sector’s overall market capitalisation rose 6.6% to US$1.35 trillion on Friday, CoinGecko data showed.Beyond BitcoinStablecoins are tokens pegged to the value of traditional assets, often the US dollar, and are the main medium for moving money between cryptocurrencies or for converting balances to fiat cash.

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Crypto world stabilises after rocky week shakes stablecoins | Malay MailHONG KONG, May 14 — Cryptocurrencies steadied yesterday, with bitcoin recovering from a 16-month low after a volatile week dominated by the collapse in value of TerraUSD, a so-called stablecoin. Crypto assets have been swept up in broad selling of risky investments on worries about high inflation…

Crypto collapse intensifies as stablecoin Tether slides below dollar peg | Malay MailLONDON, May 13 ― The meltdown in TerraUSD, one of the world’s largest stablecoins, rippled through cryptocurrency markets yesterday, pushing another major stablecoin Tether below its dollar peg and sending bitcoin to 16-month lows. Cryptocurrencies have been swept up in a sell-off in risk assets,…

Crypto meltdown deepens as stablecoin Tether drops below dollar pegLONDON (May 12): The meltdown in TerraUSD, one of the world’s largest stablecoins, sent shockwaves through cryptocurrency markets on Thursday, pushing another major stablecoin Tether below its dollar peg and sending bitcoin to 16-month lows.Cryptocurrencies have been swept up in a sell-off across higher risk assets, which has picked up steam this week as data showed US inflation running hot, deepening investor fears about the economic impact of aggressive Central Bank tightening.The sell-off has taken the combined market value

Bitcoin set for record losing streak as ‘stablecoin’ collapse crushes cryptoSINGAPORE/HONG KONG (May 13): Cryptocurrencies nursed large losses on Friday (May 13), with Bitcoin trading near US$30,000 (about RM131,775) and set for a record losing streak as the collapse of TerraUSD, a so-called stablecoin, rippled through markets.Crypto assets have also been swept up in broad selling of risky investments on worries about high inflation and rising interest rates. Sentiment is particularly fragile as tokens supposed to be pegged to the dollar have faltered.Bitcoin, the largest cryptocurrency by total market value, managed to

Crypto stress is feeding the wider sell-off in global marketsLONDON (May 12): Cryptocurrencies were once touted as a risk hedge. Now they look more like a risk spreader.As markets slumped in unison on Thursday, traders pointed to the chaos in crypto as a focal point of their concern. Strategists are increasingly worried that small traders, already nursing losses from the meme stock craze, will be wiped out on their crypto holdings and sell everything else.’Contagion here is not via linkages between the crypto ecosystem and the traditional financial

Covid-19 (May 13): 3,029 new cases, five deathsActive cases have increased but still lower than two weeks ago.

A HONG KONG/LONDON/NEW YORK (May 14): Cryptocurrencies steadied on Friday (May 13), with Bitcoin recovering from a 16-month low after a volatile week dominated by the collapse in value of TerraUSD, a so-called stablecoin. Crypto assets have been swept up in broad selling of risky investments on worries about high inflation and rising interest rates, but have started showing signs of settling. Although the near-term trajectory of the crypto market is challenging to predict, the worst may be over, said Juan Perez, a director of trading at Monex USA in Washington. “Perhaps now that all the obstacles to global growth along with monetary tightening are clear, perhaps we will start seeing swings upwards,” he said. Bitcoin, the largest cryptocurrency by market value, last rose 4.85% to US$29,925 (about RM131,610.15), rebounding from a December 2020 low of US$25,400 which it hit on Thursday. Although it hit a high of just under US$31,000 on Friday, Bitcoin remained far below week-earlier levels of around US$40,000 and unless there is a huge weekend rally, it is on track for a record seventh consecutive weekly loss. Stifel chief equity strategist Barry Bannister said Bitcoin still had further downside to about US$15,000. “Bitcoin is also GDP (gross domestic product)-sensitive because Bitcoin falls when the Manufacturing PMI (Purchasing Managers’ Index) drops as we expect [into the third quarter of 2022]indicating that a last, a capitulatory Bitcoin drop may be still ahead,” he added. Ether, the second largest cryptocurrency in terms of market cap, also gained, climbing 6.48% to US$2,051. Tether, the biggest stablecoin whose developers say is backed by dollar assets, was back at US$1 after falling to 95 cents on Thursday. But TerraUSD, the stablecoin that is also supposedly pegged to the dollar, continued to languish at 14 cents, according to data tracker CoinGecko. It has remained de-pegged from the US currency since May 9. The crypto sector’s overall market capitalisation rose 6.6% to US$1.35 trillion on Friday, CoinGecko data showed. Broader financial markets have so far seen little knock-on effect from the cryptocurrency crash. Ratings agency Fitch said in a note on Thursday that weak links to regulated financial markets will limit the potential of crypto market volatility to cause wider financial instability. “Crypto is still tiny and crypto integration within broader financial markets is still infinitesimally small,” said James Malcolm, the head of FX strategy at UBS. Beyond Bitcoin Crypto-related stocks have taken a pounding with the meltdown in the market, but on Friday, broker Coinbase rose 16% to US$67.87, although it was still down 28% on the week. Selling has roughly halved the global market value of cryptocurrencies since November, but the drawdown turned to panic in recent sessions with a squeeze on stablecoins. Stablecoins are tokens pegged to the value of traditional assets, often the US dollar, and are the main medium for moving money between cryptocurrencies or for converting balances to fiat cash. Cryptocurrency markets were rocked this week by the collapse of TerraUSD, which broke its 1:1 peg to the dollar. The coin’s complex stability mechanism, which involved balancing with a free-floating cryptocurrency called Luna, stopped working when Luna plunged close to zero. “For these types of stablecoins, the market needs to trust that the issuer holds sufficient liquid assets they would be able to sell in times of market stress,” analysts at Morgan Stanley said in a research note. The operating company of another stablecoin called Tether said it had the necessary assets in Treasuries, cash, corporate bonds and other money-market products. But stablecoins are likely to face further tests if traders keep selling, and analysts are concerned that stress could spill over into money markets if there is more and more liquidation. Fitch said cryptocurrencies and digital finance could face”significant negative repercussions” if investors lose confidence in stablecoins as many regulated financial entities had increased their exposure to the sector in recent months. Subscribe to Mid-day email alert We deliver news to your inbox daily

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