Why was more than $200bn worth of cryptocurrency wiped off the market in a day?
- A popular stablecoin lost 99% of its value
- It had a knock on effect which sent other cryptocurrencies tumbling
More than $200 billion worth of cryptocurrencies was wiped off the market in the space of 24 hours due to a massive sell-off.
In the space of a few days, cryptocurrency Terra-Luna and stable coin UST have gone from about $55bn, to effectively zero value.
Farzam Ehsani, CEO and Co-Founder of VALR.com explains how this happened.
It's what called an algorithmic stable coin. They were trying to simulate algorithmically a coin that is stable against the U.S dollar. That went into a debt spiral and $55bn dollars were wiped off the market there.Farzam Ehsani, CEO and Co-Founder of VALR.com
We're looking at extremely volatile times across the entire financial system, both crypto and traditional, so very trying times for all investors.Farzam Ehsani, CEO and Co-Founder of VALR.com
Bitcoin is about 51% down about 6 months ago, 25% down about 3 months ago, and a few percent down in the last 24 hours. We've seen a huge sell-off, but this is nothing new to the cryptocurrency markets though.Farzam Ehsani, CEO and Co-Founder of VALR.com
Volatility is tremendously accentuated in cryptocurrencies, and the smaller cap coins are going to be hit even more because liquidity is limited on those coins.Farzam Ehsani, CEO and Co-Founder of VALR.com
Scroll to the top of the article to listen to the interview.
This article first appeared on CapeTalk : Why was more than $200bn worth of cryptocurrency wiped off the market in a day?
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