On Wednesday, the implosion of the TerraUSD stablecoin kindled wide-spread panic in the crypto space. But 24 hours later, things have calmed down significantly.<\/p>\n
Terraform Labs halted,\u00a0restarted\u00a0and then\u00a0halted again its Terra blockchain<\/a><\/strong> in the wake of the collapse of TerraUSD and its related Luna token.<\/p>\n Developers who work on the blockchain said in\u00a0a tweet posted to their verified Twitter account<\/a><\/strong>\u00a0that the second halt was intended to enable them to \u201ccome up with a plan to reconstitute\u201d the network. Both TerraUSD (UST), the algorithmic stablecoin that lost and never regained its 1-1 peg to the US dollar, and the associated Luna token were trading near zero at the time of the second halt.<\/p>\n But elsewhere in crypto sentiment had started to rebound. Tether, the largest stablecoin used in cryptocurrency markets to facilitate trading, recovered from an earlier mini-crash, soothing concerns that its troubles might spill into the broader market.<\/p>\n Tokens underpinning key decentralized finance protocols also advanced. Even ApeCoin rallied, advancing more than 35% in 24 hours, according to CoinMarketCap.com.<\/p>\n Bitcoin, meanwhile, traded above $30,000 after falling to about $25,000 in the previous day\u2019s trading. And some alternative coins also gained, with Bitcoin Cash adding 20% at one point before paring gains.<\/p>\n It\u2019s a remarkably more positive picture from the havoc that overtook crypto markets on Wednesday as UST entered a \u201cdeath spiral\u201d. That day, Bitcoin had suffered a nearly 10% drop.<\/p>\n \u201cThe fact that Tether is stabilizing means that the margin calls that took place are fading,\u201d said Matt Maley, chief market strategist at Miller Tabak + Co. \u201cWhenever you get forced selling in anything, it overshoots. People are still nervous, but the selling has abated. Investors will be nervous for a few more days, but the supply-demand equation has stabilized again.\u201d<\/p>\n Market-watchers noted that Bitcoin, which typically trades in tandem with the stock market, was able to gain on Thursday even as the S&P 500 and Nasdaq 100 sunk 0.1% and 0.2%, respectively.<\/p>\n Treasury Secretary Janet Yellen, meanwhile, said Terra\u2019s tumble showed the dangers of tokens that purport to be pegged to the US dollar, though she added that its implosion didn\u2019t pose a threat to financial stability.<\/p>\n \u201cCrypto has little economic significance. Not that many people own much of it,\u201d said Brian Nick, chief investment strategist at Nuveen. Still, he added that the crypto market is being swayed by the same forces that are affecting equities right now.<\/p>\n \u201cWhat gets punished when financial conditions are tightening? Anything with a high valuation and an uncertain or non-existent revenue stream,\u201d he said by phone. \u201cAnd crypto has inarguably high valuations and no revenue stream. That\u2019s very much of a piece with what we\u2019re seeing in growth stocks, tech. It\u2019s correlated but obviously it\u2019s more volatile because the market is less liquid.\u201d<\/p>\n Various trading desks reported business-as-usual conditions, with B2C2 saying it saw two-way flows into UST, and more buying in USDC. Stephane Ouellette, chief executive of FRNT Financial Inc., said he\u2019d received questions about Tether, with clients wondering if its dislocation provided any arbitrage opportunities.<\/p>\n \u201cLast night there was a huge arb,\u201d he said, adding that \u201ceverything at Tether and Bitfinex appears to be working as usual.\u201d<\/p>\n \u201cThere\u2019s no indication there\u2019s anything going wrong there at all besides the market move, which is now looking like it was circumstantial,\u201d he said.<\/p>\n Still, cryptocurrencies remain mired in a deep downturn. \u201cThe question, as always, is: now what?,\u201d wrote Michael Purves, chief executive and founder of Tallbacken Capital Advisors. He expects further downside for Bitcoin and is looking at the coin potentially hitting $20,000 or $15,000.<\/p>\n \u201cA move to 15K would be a move off the January levels which would be quite consistent with the last three long term momentum reversals we have seen,\u201d he said in a note. \u201cHowever, bears should be prepared for aggressive relief rallies along the way (just as they should with equities).\u201d<\/p>\n On Wednesday, the implosion of the TerraUSD stablecoin kindled wide-spread panic in the crypto space. But 24 hours later, things have calmed down significantly.<\/p>\n","protected":false},"author":341034,"featured_media":444372,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[44696],"tags":[187,78350,78346,78370,78348,48385],"class_list":["post-444364","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency","tag-bitcoin","tag-luna","tag-terra","tag-terraform-labs","tag-terrausd","tag-tether"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/444364"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/341034"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=444364"}],"version-history":[{"count":0,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/444364\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/444372"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=444364"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=444364"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=444364"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nNow read:\u00a0I bought from Takealot using cryptocurrency without touching a bank<\/a><\/h3>\n","protected":false},"excerpt":{"rendered":"