It seems that the wave of sell-offs is still gripping the cryptocurrency market and the trend is not going to reverse right away. The price of Bitcoin was briefly near the $25,000 mark during Thursday’s trading.
Bitcoin has fallen to almost half its value
Less than a month ago, Bitcoin was trading at more than $42,000; now it is struggling to stay above $25,000. In three weeks, the most widely used cryptocurrency has lost about 40 percent of its value. While the sell-off in recent days was based mainly on developments in equity markets and expectations that the US Federal Reserve would further tighten its monetary policy, other factors have now been added.
TerraUSD stablecoin collapse
These include a fall in the price of the TerraUSD stablecoin, whose value is pegged to the US dollar at a certain fixed ratio. But on Thursday, that confidence fell to some extent as the TerraUSD also fell against the dollar. “The collapse of TerraUSD has spilled over into other cryptocurrency markets. We are seeing sell-offs in Bitcoin, Ethereum and most so-called altcoins,” Richard Usher, head of trading at BCB Group, told Reuters.
Bitcoin’s market capitalization is now only slightly above $550 billion, while just a few months ago it was above one trillion.