Blockchain analytics platform Chainalysis has released a report analysing the crash of Terra’s stablecoin UST, concluding that it while it was a factor in the recent crypto market crash, it wasn’t the deciding factor.
Instead, the report read, “the crypto market’s recent downturn appears more closely linked to the tech market decline than to UST’s collapse.”
According to Chainalysis, Bitcoin’s correlation with tech stocks is “a relatively new development,” with the leading cryptocurrency maintaining “significant price correlations” with the NASDAQ-100 Technology Sector Index and the S&P 500 Index in 2022, and falling in concert with them.
UST’s crash did exacerbate Bitcoin’s downward trend, Chainalysis found, but the effect was “short-lived,” with the end of the accelerated decline coinciding with the close of UST’s collapse. Following this, Bitcoin’s price action “fell back in line with non-crypto tech assets.”
The crash also caused a spike in redemptions of stablecoins, with...
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