Crypto Market Crash Latest News Today (May 12) and Updates: The global cryptocurrency market seem to have landed itself in a free fall, with prices of several top tokens falling to new lows. There has been a massive churn in the list of top cryptos by market cap in the last 48 hours.
Data on CoinMarketCap shows that Terra (LUNA), which was one of the top cryptos just a few days ago, has dropped to 59th rank, losing over 99 per cent of its value in the last 7 days. In the last 24 hours itself, its price has come down by over 96%.
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Bitcoin has lost over 28 percent of its price value in the last 7 days. At the time of press, BTC price was just $28,542. Meanwhile, price of TerraUSD (UST), which is believed to be the price driver of the current crypto market crash, has dropped by 32% in the last 7 days. In the last 24 hours, UST price dropped by over 18 per cent to $0.6782.
Here’s a look at some of the key developments and updates from crypto markets:
1. While BTC dropped by 9% in the last 24 hours, ETH fell by 15% and altcoins like LUNA dropped by over 90%. Though a minor recovery took BTC slightly above $32,000, the prevalent overhead selling pressure and extreme fear in the market took the price down to levels below $28,511.
2. “Data showed that the rate of BTC exchange inflow remained relatively high in the last couple of days. Investors often transfer their holdings to exchanges when they intend to sell,” Darshan Bathija, CO founder & CEO, Vauld, told FE Online.
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3. Luna dropped below $1, while the blockchain’s stablecoins UST lost its peg again.
Additionally, the total value locked on Anchor, (Terra’s biggest DeFi protocol), fell by $11 billion in the past few days.
4. Terra’s algorithmic stablecoin UST crashed to a low of around $0.30, after losing its peg to the dollar.
5. Edul Patel CEO & Co-founder, Mudrex, says: Bitcoin hit its lowest at US$28,000 in the past 24 hours, which is the weakest since 2020.
“BTC appears to be at oversold levels with increasing selling pressure. Since yesterday, BTC has been struggling to find its support between US$27,000 and US$30,000. It is also likely that BTC may even break below the current level. Along with macroeconomic factors, the collapse of UST has largely impacted the crypto market. It may take some time for cryptocurrencies to recover from this crash.”
5. According to Bathija, most stable coins like Tether and USDC are backed by assets like cash and bonds; in the case of algorithmic stablecoins, like UST, they are supposed to be automatically pegged to the price of another digital asset.
“One UST can be redeemed or minted for exactly $1 worth Luna. Luna Foundation Guard (LFG), the non-profit foundation created to support the Terra Ecosystem, bought various cryptocurrencies including Bitcoin in order to maintain the stable coin’s peg,” he said.
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6. Earlier in the week, when BTC fell to $30,000, LFG’s reserves ratio to UST issued fell as well, forcing LFG to liquidate its BTC reserves.
“The effect of this move is not only being felt in the market, but has also raised concerns from regulators. U.S. Treasury Secretary Janet Yellen cited the UST issue to push for stablecoin regulation,” said Bathija.
