In what seems to be more bad signs for the crypto market, the largest stablecoin Tether fell below $0.96. Price fluctuations in stablecoins are also triggering the crypto market, with Bitcoin being $28,304 at the moment and Ethereum being $1930.93 at the time of writing.
In a similar manner, another stablecoin, TerraUSD is currently $0.6258, still below the intended $1 cap. Stablecoins are cryptocurrencies that have their value pegged to that of another currency, as in this case, the US Dollar. These coins provide investors with safer, more stable options when entities like Bitcoin and Ethereum are volatile.
According to Bitstamp data, Bitcoin went as low as $25,919.33 on Thursday morning, hitting a 16 month low. The same morning UST was trading at around 54 cents, well below the intended $1 value. Another stablecoin Luna which had a floating price ended up losing 97% of its value in less than 24 hours, the last trading at $0.02358.
As bad as the Bitcoin hit was, the fall was still relatively softer as compared to other cryptocurrencies. AVAX, SOL and SAND dropped 36%. 33% and 31% respectively and meme coins like SHIB and DOGE fell 29% and 26%.
We don’t know what’s causing this shift in the market at the moment. What we do know is that these changes in stablecoins and continued market turbulence is affecting crypto prices.
As for stablecoins, the competition is trading at a premium as compared to USDT as of right now with Binance USD running at $1.01 and USD Coin painting the $1 peg.
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