Cryptocurrency bitcoin has fallen to a level of $33,266 in morning trade, compared to its lowest value of $32,951 in January, due to sinking markets affecting cryptocurrencies which are trading in line with riskier assets such as tech stocks. It steadied to trade around $33,500, decreasing by 1.4%. Additionally, ether fell as low as $2,421, compared to its previous drop in late February.
With other factors declining over the weekend, bitcoin closed around $36,000 which projected the cryptocurrency market’s low liquidity over the weekends, with fears that algorithmic stablecoin Terra USD (UST) could lose its peg to the dollar, Matt Dibb, COO, Stack Funds, said. “I think everything within crypto is still classed as a risk asset, and similar to what we’ve seen with the Nasdaq, most crypto currencies are getting pummelled,” he added.
As per reports, Nasdaq fell 1.5% last week, and has lost 22% year to date, due to the prospect of persistent inflation which forced the US Federal Reserve to hike rates despite slowing growth. Nasdaq futures were down an additional 0.8% in Asia trade.
Reports claimed that the value of stablecoin UST is observed by the crypto community because of its 1:1 dollar peg and its founders’ plan to build a $10 billion worth bitcoin reserve for backing the stablecoin. So, the volatility in UST could affect the bitcoin markets, according to the data.
(With inputs from Reuters)