Bitcoin’s (BTC) price dipped below the $27,000 barrier on Thursday for the first time in more than a year as the declining money supply and the breakdown of the stable coin TerraUSD continue to weigh on the mood.
The number one cryptocurrency sank to $25,401 on Thursday morning, marking the first time it slipped below $26,000 since December 2020.
Bitcoin’s slide was followed by Ether (ETH), which plummeted to $1,789. This was the first time the second-largest cryptocurrency slipped below the $2,000 barrier in a year.
The sell-off in the crypto market happened after the stock market dropped sharply because the economy is getting worse and interest rates are going up.
The latest US inflation figures released on Wednesday showed that prices for goods and services rose 8.3 percent in April, just below the 40-year high.
Another reason that worried investors and caused the crypto selloff was the breakdown of the contentious stablecoin system TerraUSD (UST) (UST). The value of the stable coin UST, which was supposed to stay at $1, dropped below 30 cents on Wednesday. This caused investors to give up on their bets on decentralized financing.
The world’s biggest stablecoin, Tether (USDT), recently breached its $1 peg. Similar to UST, Tether was also supposed to replicate the value of the US dollar, but the stable coin slid to 94.10 cents in early trade on Thursday.
The Tethertoken is one of the most significant assets in the global crypto market since the token, like other stablecoins, was meant to offer investors a safe location to park their funds between placing bets on volatile cryptocurrencies.
