Cryptocurrencies such as bitcoin and ethereum are losing value significantly. What is going on? † crypto

Major cryptocurrencies such as bitcoin and ethereum fell due to problems at the stablecoin TerraUSD. It fell far below the dollar because there was too little real money to match. The idea of ​​a ‘stablecoin’ is precisely that it has a stable value against one other currency, or a basket thereof.

Bitcoin has fallen more than 14 percent in the past 24 hours, according to figures from Coinmarketcap, a site that aggregates data from many crypto exchanges. One bitcoin is now worth less than 27,000 dollars (converted 25,600 euros). The digital currency has not been this low since December 2020. Ethereum lost almost 23 percent in 24 hours. That coin is now worth $1831.

The problems surrounding TerraUSD have been going on for some time now. That digital coin is supposed to be worth 1 dollar, but it moved between 20 and 70 cents for a coin last night. The party behind the stablecoin is meanwhile trying to raise about 1.5 billion dollars to support the TerraUSD.

The TerraUSD situation has made several crypto investors concerned again about how mature the crypto market is and how secure their investments are. This has led to the necessary sales and strong price declines.

Apart from the problems with the TerrasUSD stablecoin, investors are also fleeing risky assets as interest rates rise. After the Federal Reserve raised its benchmark interest rate, the largest tech companies such as Google, Apple and Facebook lost more than $1 trillion in value. Stocks in general sold out in droves, but the technology world suffered even harder than other sectors.

Investor sentiment is also suffering from persistently high inflation, uncertainty due to the war in Ukraine and new lockdowns due to the corona virus in China.