Algorithmic stablecoins, like their more “traditional” counterparts, are supposed to provide calm in the chaos of crypto. Instead, as investors in one such token are rapidly finding out, they can serve as lightning rods for volatility.
Rather than trading at $1, as designed, the TerraUSD coin, or UST, slipped over the weekend to around 99 cents. By Monday evening in New York, it had plunged to 60 cents, obliterating its previous low of 92 cents in May 2021. It clawed back losses on Tuesday and is fluctuating between around 90 cents and $1 -- a sign of trouble.
What caused Terra’s coin to become untethered is a topic of intense internet debate. The disconnect happened alongside a sharp selloff in cryptoassets -- including a plunge in Bitcoin to below $30,000 -- and a broader retreat from risk assets including stocks. Whatever the catalyst, it’s no small thing: There are around 18.5 billion of UST in circulation, according to CoinMarketCap, a big enough presence that its swings could...
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INN caught up with cryptocurrency investment expert Dan Hoover to review the current landscape and where the market may be heading. The cryptocurrency investment marketplace has gone through severa...