Why did Terra and Bitcoin crash and are cryptocurrencies rebounding now?

“Meltdown”, “turmoil”, “financial disaster”. It has been quite a week for the world of cryptocurrencies as markets plummeted and the value of investors' holdings in digital assets such as Bitcoin and Terra rapidly diminished.

Bitcoin was set for a record losing streak while Terra, a stablecoin, collapsed to close to zero on Thursday.

But what happened? Why did the crash occur and is it now over?

What happened to Terra?

Stablecoins, which are pegged to the value of traditional assets such as the US dollar, are usually popular in times of turmoil. They are key elements of the cryptocurrency market and traders park funds in these assets as they move in and out of other digital tokens.

However, Terra slipped below its 1:1 peg to the dollar this week, as global stock markets fell amid rising interest rates and high inflation.

Terra's value is derived by algorithmic processes and it is linked to another paired token called Luna.

Luna fell by more than 94 per cent on Wednesday to almost zero, compared with a high of $119.51, and the blockchain behind both coins twice stopped processing new transactions.

BUSINESS, CRYPTOCURRENCIES, BITCOIN, PERSONAL FINANCE

The blockchain’s validators unveiled a software update designed to help avoid attacks on the network.

The largest stablecoin, Tether, also diverged from its 1:1 peg, although marginally.

Read More : https://www.thenationalnews.com/business/cryptocurrencies/2022/05/13/why-did-terra-and-bitcoin-crash-and-are-cryptocurrencies-rebounding-now/

Comments

Post a Comment

Popular posts from this blog

Modi 3.0 With 72 Ministers Takes Oath, 9 New Faces In Cabinet

Image
Prime Minister Narendra Modi took oath today along with 71 ministers of the new coalition government. Thirty of them are Cabinet Ministers, five independent charge, and 36 Ministers of State. The portfolios will be announced later. Modi 3.0 With 72 Ministers PM Modi, 73, will head a coalition government in his third term, or Modi 3.0, for the first time since he became Prime Minister in 2014 following a huge "Brand Modi" victory after 10 years of the United Progressive Alliance (UPA) rule. He is the second Prime Minister after Jawaharlal Nehru to be elected for a third term in a row. The oath ceremony is being held at the lawns of the Rashtrapati Bhavan, with the weather office forecasting a maximum temperature of 42 degree Celsius in the national capital. President Droupadi Murmu administered the oath to PM Modi. Rajnath Singh and Amit Shah took oath after him. Nitin Gadkari was the fourth leader to be administered the oath of office by the President. JP Nadda, Shivraj Singh
Read more

Peru to sue Repsol for $4.5bn over oil spill

Image
Peru's consumer protection agency is suing Spanish oil firm Repsol over a huge oil spill which blackened beaches off the coast of Lima in January. The spill, which Peru called the worst ecological disaster around Lima in recent memory, leaked more than 10,000 barrels into the Pacific Ocean. The civil lawsuit seeks $3bn (£2.54bn) for environmental damage and $1.5bn (£1.27bn) for damages to locals. Repsol has denied responsibility. On Tuesday, a Peruvian judge admitted the $4.5bn lawsuit by Indecopi against Repsol, meaning the case will go to court. An underwater oil pipeline owned by the company caused a spill on 15 January. It happened when an Italian-flagged tanker, Mare Doricum, was unloading at Repsol's La Pampilla refinery. Repsol initially said the spill was caused by "sudden and extraordinary anomalous waves produced by the volcanic eruption in Tonga". However, it later blamed the oil tanker. The firm has denied responsibility for the spill and told Reuters tha
Read more

Experience the Magic of Christmas with the Best Home Theatre Systems at Rajan & Co in Tamil Nadu

Image
Get ready for the ultimate movie experience with the best home theatre showroom in Nagercoil - Rajan & Co! We have a wide range of options available to suit your needs and budget. And with our live Christmas sale, you can enjoy flat discounts on all our products. Don't miss out on this amazing opportunity to upgrade your home theatre setup at never before seen prices! Best Home Theatre Showroom In Nagercoil, Rajan & Co Contact Details: Address : 50, Court Rd, Opp SLB School, Nagercoil, Tamil Nadu 629001. Email : rajanandco123@gmail.com Business Phone: (+91) 8526333363 Website: https://www.rajanandco.in/ A home theatre system is typically an audio enhancing device which includes a TV, a video source, a receiver and speakers. This powerful combination channels crystal-clear audio and surround sound, elevating the listening experience. Before investing in a home theatre for your home, you should consider things like the number and type of speakers you would like to have, where
Read more