After the crash of the ‘stablecoin’ sparked panic, could the fall of the wider crypto market lead to a more permanent economic crunch?
The collapse of a multibillion-dollar cryptocurrency called terra has sparked a wave of “fear, uncertainty and doubt” across the sector, leading some, like Coinbase’s chief executive, Brian Armstrong, to suggest the industry is heading for another “crypto winter”.
Then there are stablecoins, the biggest examples of which, such as tether and USD Coin , are effectively the sector’s banks, taking customer deposits, holding them as reserves, and issuing tokens that are supposedly guaranteed to have a fixed value relative to conventional currencies.non-fungible tokens, or NFTs
However, last week the collapse of the terra stablecoin precipitated a much steeper plunge. Unlike larger rivals, terra did not have customer deposits backing it – instead, its stable value of $1 was based on faith in its underlying algorithm, which maintained its value by printing a sister cryptocurrency, luna. But over the course of Monday and Tuesday that faith was shattered, and slipped into a “death spiral”, automatically printing ever more worthless luna, which crashed the price further.
Philippines Latest News, Philippines Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Terra’s $64b bashing creates a crowd of crypto losersThe rapid collapse of terraUSD and its sister token luna has sent a ripple effect across the industry and threatens to have a cooling effect on crypto fundraisings.
Read more »
The joy of new friendships that comes with having kidsNearly all my friends for some years were also the mothers of my two sons’ friends. As my teenage son later remarked, “Mum, you wouldn’t have any friends if it weren’t for us” friendship
Read more »
Shares tipped for strong open, crypto stabilisesAustralian futures are 0.8pc higher as investors eye crucial wages and employment data, election deadlock risk, rising oil prices, and wild crypto markets.
Read more »
Digital sneakers let you earn crypto while you walkIf you want to experience StepN, the latest app crypto investors are talking about, you have to be willing to fork out almost $1000 for a pair of digital sneakers.
Read more »
Letters: Libs a poor fit for richer votersTeal independents’ challenge, Liberal moderates, Morrison’s image, climate policy and the reef, the Queen’s plans, COVID-19 deaths, Chinese ambassador’s appeal, crypto meltdown.
Read more »
ATO targets work expenses, crypto gainsPeople who simultaneously claim home office expenses and travel costs such as tolls will come to the attention of the Tax Office, which is also warning about the declaration of crypto gains.
Read more »