TerraUSD (UST) is an algorithmic stablecoin that is pegged at $1.00. But, on the evening of May 19, it was trading for $0.083. This isn’t supposed to happen, of course, but last week UST, along with its affiliated coin Terra (LUNA), performed a sort of death spiral that “wiped nearly $50 billion of investor wealth in a few short days,” according to NYDIG’s May 13 newsletter. The crash shook the crypto sector, but it also raised some questions: Is this about a single flawed project or is it also about an entire class of cryptocurrencies — algorithmic stablecoins — which …

TerraUSD (UST) flipping Binance USD (BUSD) for the third spot in market capitalization didn’t last long. The once-mighty stablecoin that powers the entire Terra ecosystem has found itself reduced to “Terra is more than UST” tweets. While no one knows for sure if LUNA can stage a comeback, UST will certainly go down as one of the algorithmic stablecoins that went kaput in the same fashion as Basis Cash — which Terra creator Do Kwon was allegedly a part of — and Mark Cuban-backed Iron Finance. UST’s failure begs the question if algorithmic stablecoins are truly just doomed to fail? …

Tether (USDT) and Bitfinex chief technology officer Paolo Ardoino said that the Terra (LUNA) project was not intended to be a rug pull, but was simply “poorly designed.” Speaking on the Terra ecosystem’s market-shattering crash, Ardoino likened its algorithmic stablecoin TerraUSD (UST) to a “castle of cards” that was due to fall at any time. Many in the crypto community have highlighted a long list of dubious comments and actions from beleaguered Terraform Labs founder Do Kwon that raise questions about his actions. It has also been reported that Kwon also worked on a previously failed algo-stablecoin project dubbed Basis …

USDT Stablecoin issuer Tether (USDT) has reported it cut its reserves allocation to commercial paper investments and increased that of United States Treasury bills over the first quarter of 2022. In a Thursday blog post, Tether reported its reserves were “fully backed,” seemingly in an effort to assuage many users’ fears around USDT briefly depegging from the dollar on May 12. According to the stablecoin issuer, its commercial paper holdings over Q1 2022 decreased 17% from roughly $24 billion to $20 billion, with an additional 20% reduction to be reflected in the firm’s next quarterly report. Tether also increased investments …

Switzerland’s southern city of Lugano will host a blockchain- and cryptocurrency-focused school as part of a partnership between the local government and Tether (USDT). In a Thursday announcement, Tether and Lugano said they will be launching the Plan ₿ Summer School in an effort “to bring blockchain and crypto education to the masses.” The education center is part of Tether’s "Plan ₿" initiatives with the Swiss city, which have included making Bitcoin (BTC), Tether (USDT) and the LVGA token legal tender in the area. @luganomycity @Tether_to @FranklinSwitz @USI_university announced today the launch of @LuganoPlanB Summer School, 3-16 July 2022. Apply …

The past week has not been an easy one. After the collapse of the third-largest stablecoin (UST) and what used to be the second-largest blockchain after Ethereum (Terra), the depeg contagion seems to be spreading wider. While UST has completely depegged from the U.S. dollar, trading at sub $0.1 at the time of writing, other stablecoins also experienced a short period where they also lost their dollar peg due to the market-wide panic. Tether’s USDT stablecoin saw a brief devaluation from $1 to $0.95 at the lowest point in May. 12. FRAX and FEI had a similar drop to $0.97 …

Financial commentator Frances Coppola is convinced that algorithmic stablecoins such as TerraUSD (UST) will always be vulnerable to sudden collapses, no matter how much the technology improves. “They can improve their game theory, they can improve their risk assessment, but I think there will still always be some states of the world that they won’t have thought of,” pointed out Coppola in a discussion with Mike McGlone, senior commodity strategist at Bloomberg. Terra’s UST stablecoin, which relied on an algorithm to maintain a peg to the U.S. dollar, collapsed last week, sparking turmoil in the crypto markets. According to McGlone, …

Cryptocurrency investors and traders have cashed out $7.7 billion from the stablecoin Tether (USDT), resulting in its market capitalization falling by 7.8% over the past seven days to $76 billion. The amount withdrawn from the top stablecoin is nearly double the $4.1 billion it held in cash reserves at the end of 2021, according to Tether’s latest reserves report from December 2021. To maintain Tether’s peg with the United States dollar, the company behind the token backs USDT with assets such as cash, bonds and Treasury bills, the purpose being that each token is backed by at least $1 worth …

Bitcoin (BTC) starts a new week under $30,000 as the battle to save the market from fresh lows grinds on. After hitting its highest since the Terra (LUNA) crash last week, the largest cryptocurrency nonetheless continues to fail to reclaim $30,000 as support. What could be in store this week? The potential for major upheaval from macro players, notably the United States Federal Reserve, is shapeshifting this week ahead of the World Economic Forum. At the same time, internal crypto market pressure remains as the implications of LUNA’s collapse continue to play out. Cointelegraph takes a look at five potential …

The cryptocurrency market has lost $1.9 trillion six months after it soared to a record high. Interestingly, these losses are bigger than those witnessed during the 2007 subprime mortgage market crisis — around $1.3 trillion, which has prompted fears that creaking crypto market risk will spill over across traditional markets, hurting stocks and bonds alike. Stablecoins not very stable A massive move lower from $69,000 in November 2021 to around $24,300 in May 2022 in Bitcoin’s (BTC) price has caused a selloff frenzy across the crypto market. Unfortunately, the bearish sentiment has not even spared stablecoins, so-called crypto equivalents of …

This week the crypto market endured a sharp drop in valuation after Coinbase, the leading U.S. exchange, reported a $430 million quarterly net loss and South Korea announced plans to introduce a 20% tax on crypto gains. During its worst moment, the total market crypto market cap faced a 39% drop from $1.81 trillion to $1.10 trillion in seven days, which is an impressive correction even for a volatile asset class. A similar size decrease in valuation was last seen in February 2021, creating bargains for the risk-takers. Even with this week’s volatility, there were a few relief bounces as …

Ether (ETH) is down 38% in three weeks and the current $2,000 level is 59% below the $4,870 all-time high that was reached in November 2021. Additional newsflow that added to the current marketwide volatility were the bankruptcy fears that emerged after Coinbase, the largest United States exchange, reported a $430 million first-quarter 2022 loss. In the most recent 10-Q filing Coinbase included the following disclosure: “In the event of a bankruptcy, the crypto assets we hold on behalf of our customers may be subject to bankruptcy proceedings.” Regulatory uncertainty was also partially responsible for Ether’s sharp correction. On May …