CNBC reports that yesterday’s bitcoin price fell below $26,000 for the first time since 16 months. It continued to fall. In the face of this alarming backdrop, more than $200 billion was withdrawn in just one day due to a massive sale of crypto assets.
According to Coin Metrics, the price of bitcoin fell to $25,401.29 on Thursday — the first time since December 26, 2020 that the cryptocurrency rate fell below $27,000. for a coin.
It is well-known that Ether, the second most-popular cryptocurrency, fell in value to $1704.05, the lowest price since June 2021. Now the rate is slowly recovering.
In case of panic, such as rising prices or economic problems, investors will attempt to sell their crypto assets. The latest data shows that the US inflation rate rose to 8.3% in April. This is higher than what experts had expected. Inflation has reached its highest point in 40 years.
A significant factor was also the fall in TerraUSD (UST), the stablecoin. It was originally supposed to be priced at $1. But on Wednesday, it was worth less that 30 cents. This has undermined investor confidence and trust in decentralized assets. Investors will convert assets into stablecoins during turbulent times. But recent events with “algorithmic UST”, not backed up by real assets, have shown owners are in a rush to get rid such a currency in case of crisis. According to CoinDesk the UST stablecoin is now only $0.07.
Stablecoins with real financial backing also suffered. Investors feared that there wouldn’t be enough reserves to support the price in case of a mass sales, and the largest Tether (USDT), fell to 95cs on Thursday. However, CoinDesk now shows its value to be almost equal to par.