Huge Crash Wipes Out Bitcoin, Other Cryptocurrencies

Over $200 billion erased from the cryptocurrencies’ market in one day as selloff has intensified. The price of bitcoin plunged below $26,000 on Thursday, hitting the lowest level in 16 months.

The price of bitcoin plunged as low as $25,401.29 on Thursday. That marks the first time the cryptocurrency has sunk below the $27,000 level since 26 December 2020. Bitcoin has since pared its losses and was last trading at $28,569.25, down 2.9%.

Ether, the second-biggest digital currency, tanked to as low as $1,704.05 per coin. It’s the first time the token has fallen beneath the $2,000 mark since June 2021. Ether was last down 8.8% at a price of $1,937.88.

Investors are fleeing from cryptocurrencies at a time when stock markets have plunged from the highs of the coronavirus pandemic on fears over soaring prices and a deteriorating economic outlook. US inflation data out Wednesday showed prices for goods and services jumping 8.3% in April, higher than expected by analysts and close to the highest level in 40 years.

The downfall of embattled stablecoin protocol Terra. TerraUSD, or UST, supposed to mirror the value of the dollar, is an additional factor behind the current crypto crash. UST plummeted to less than 30 cents on Wednesday, shaking investors’ confidence in the decentralized finance space.

On Thursday, UST was trading at about 41 cents, still well below its intended $1 peg. Luna, another Terra token that has a floating price and is meant to absorb UST price shocks, erased 99% of its value and was last worth just 4 cents.