12/26/2023 0 Comments Stablecoin death spiral![]() ![]() That is the environment that fed the boom in both US technology stocks and cryptocurrencies, and now it is over. The US Federal Reserve aggressively hiked rates by 0.75 per cent last Wednesday and more increases will follow, marking a dramatic reversal from the past 20 years of near-zero rates and apparently limitless stimulus. ![]() In Turkey, it is in excess of 70 per cent,” Mr Razaqzada says. US inflation rose to 8.6 per cent in May, defying expectations of 8.3 per cent, while it has hit a record high of 8.1 per cent in the eurozone. “There is a high probability of another crypto or exchange going bust as market turmoil is now utterly pessimistic.” In comparison, it touched $3tn on November 10. Total cryptocurrency market capitalisation has now fallen below $1 trillion to about $983 billion. This added to jitters over cryptocurrency stability, which had already been stoked by the collapse of the Luna and Terra tokens, and the world’s largest stablecoin Tether temporarily breaking its link with the US dollar in May. So much for cryptocurrencies taking on the might of the banking system and putting investors in charge of their money. There are signs of stress and panic everywhere, with cryptocurrency lender Celsius freezing withdrawals and transfers citing “extreme” market conditions in a move that was quickly followed by Binance. “The crash has wiped out its bull market cycle gains, taking prices to December 2020 lows and killing the blockchain euphoria.” The entire alt-coin space is in a death spiral, with some losing a quarter of their value in only one day’s trading, Vijay Valecha, chief investment officer at Century Financial, says. Changpeng Zhao, founder and chief executive of Binance, is the world’s richest crypto billionaire with a net worth of $65 billion. ![]()
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