The cryptocurrency market continued to bleed money Thursday, with the most popular coins falling double-digit percentages over the past 24 hours. And absolutely no one knows when the bottom will be reached, as many people fear that the entire fake digital money market could go to zero as stablecoin Tether officially traded below $1 for the first time early Thursday.
Bitcoin, the world’s most popular cryptocurrency, is down 11.2% over the past day and is currently at $27,959 — about 58% below its all-time high of $69,000 in mid-November. Ethereum has struggled even worse over the past 24 hours, falling 19.9% to a price of $1,930.
The culprit for the crypto bloodbath was a chain reaction that started over the weekend when Terra’s stablecoin TerraUSD, which was theoretically supposed to stay at $1, was depegged and started trading below a dollar. This sent shockwaves through the crypto community as stablecoins are said to be backed by real assets and not just Monopoly money. At least that was the promise, although investigative reporters found it all a game of smoke and mirrors.
Tether, the world’s most popular stablecoin, was also depegged for the first time early Thursday, falling to $0.95 on major exchanges before recovering slightly to $0.98 at the time of this writing. But even at $0.98, the usefulness of a stablecoin is completely wiped out because it’s not worth exactly $1, causing speculators to rush in and try to make money by buying Tether at a cheaper price, in assumption that they can later be sold for $1. And that’s exactly the kind of volatility you already have with cryptocurrencies that isn’t helping people looking for a safe haven that’s easier to use to convert to fiat.
Terra’s Luna, the fourth most popular cryptocurrency in the world (as of early Monday), is down another 98% in the past 24 hours. Currently, the crypto is trading at just $0.04, a week ago the crypto was worth over $87, and $54 early Monday. Anecdotes about people who have lost their entire lives have surfaced on social media sites like Reddit the savings of life in the collapse of Luna, although Gizmodo has not yet been able to independently verify any of these stories.
Other top cryptocurrencies are also down, with BNB down 18% to $254.45 over the past 24 hours, XRP (Ripple) down 28% to $0.36, Cardano down 32% to 0, $44 and Solana is down 33% to $43.14. Dogecoin, the joke meme currency turned serious investment, is down 29% over the past day to $0.07.
As we explained on Monday, when you have invested $100 in one of the most popular cryptocurrencies six months ago, you have lost a significant amount of money. And if you’ve been listening to Matt Damon insist that “fortune favors the brave” during his Super Bowl commercial for Crypto.com, you’re probably kicking yourself.
As crypto expert Ben McKenzie points out on twitter, there are a few things to watch out for when the crypto market crashes. First and foremost, look for exchanges that are suddenly not allowing people to withdraw funds in the name of “scheduled maintenance,” something Binance US had already announced overnight would happen this morning 6:00 p.m. ET to 9:30 p.m. ET.
“While these shenanigans are fun (and lucrative for the big boys) when the price goes up, all hell breaks loose when it goes down. You, my dear average casino patron, are not at the forefront of their minds…” McKenzie tweeted.
But that’s just an expert’s opinion. How Deep Can Crypto Go? Again, no one can say for sure. But if you’re looking for cheap crypto, it’s probably a good idea to at least wait and see what happens to Tether in the coming days and weeks. Experts like McKenzie have warned that a Tether collapse could completely devastate the value of Bitcoin Nothing. And we will now perhaps see whether this theory works.