© Reuters. ARCHIVE PHOTO: Representations of Ripple, Bitcoin, Etherum and Litecoin virtual currencies are seen on a PC motherboard in this illustrative image, February 14, 2018. REUTERS / Dado Ruvic / Illustration
SINGAPORE / HONG KONG (Reuters) – Cryptocurrencies made big losses on Friday, with bitcoin trading near $ 30,000 and a record loss streak was set as the collapse of TerraUSD, a so-called stable currency, spread to the markets.
Cryptographic assets have also been affected by the widespread sale of risky investments due to concerns about high inflation and rising interest rates. The sentiment is particularly fragile, as the tokens that were supposed to be tied to the dollar have faltered.
, the largest cryptocurrency in total market value, managed to rebound in the Asian session and traded at $ 30,300 at 0623 GMT, up 5%. He has made some 16-month recovery of about $ 25,400 reached on Thursday.
But it remains well below last week’s levels of about $ 40,000, and unless there is a rebound in weekend trade, it is heading for a seventh consecutive weekly loss.
“I don’t think the worst is over,” said Scottie Siu, chief investment officer of Axion Global Asset Management, a Hong Kong-based company that manages a cryptocurrency fund.
“I think there are more disadvantages in the coming days. I think what we need to see is that open interest is collapsing a lot more, so speculators are out of it, and that’s when I think the market is ‘will stabilize’.
TerraUSD (USDT) broke its 1: 1 dollar bond this week as its mechanism for staying stable, using another digital token, failed under selling pressure. It was last traded at about 10 cents.
the largest stable currency, which developers say is backed by dollar assets, has also come under pressure and fell to 95 cents on Thursday, according to CoinMarketCap data, but returned to a dollar on Friday.
Selling has halved the global market value of cryptocurrencies since November, but the decline has become a panic in recent sessions with the pressure of stable currencies.
These are tokens linked to the value of traditional assets, often the U.S. dollar, and are the primary means of moving money between cryptocurrencies or converting balances into fiduciary cash.
“More than half of all bitcoins and ether traded on the stock exchanges are compared to a stable currency, with USDT or Tether taking the brunt,” analysts at Morgan Stanley (NYSE 🙂 said in a research note.
“For these types of stable currencies, the market needs to be confident that the issuer has enough liquid assets that they could sell in times of market stress.”
Tether’s operating company says it has the necessary assets in cash, cash, corporate bonds and other money market products.
But Tether is likely to face further testing if traders continue to sell, and analysts are concerned that stress could break out in money markets if pressure forces an ever-increasing liquidation.
Ether, the second-largest cryptocurrency by market capitalization, stabilized at around $ 2,000 on Friday after falling as low as $ 1,700 on Thursday. Bitcoin and ether are about 60% below record highs in November.
Cryptography-related stocks have also shrunk, Coinbase broker (NASDAQ 🙂 stocks have stabilized overnight, but are still down by half in just over a week.
In Asia, Hong Kong-listed Huobi Technology and BC Technology Group, which operate commercial platforms and other cryptographic services, saw weekly falls of more than 17%.
Amidst the unrest, Nomura said on Friday that it had begun offering bitcoin derivatives to customers, the latest move from a traditional financial institution to the asset class.