Following the collapse of TerraUSD, a so-called stablecoin, resonated across markets, cryptocurrencies suffered significant losses on Friday, with bitcoin trapped below $30,000 and on track for a record losing streak.
Concerns about high inflation and rising interest rates have prompted widespread dumping of hazardous investments, including crypto assets.
However, sentiment is particularly shaky, as tokens that were intended to be tethered to the dollar have failed.
Bitcoin, the most valuable cryptocurrency by market capitalization, attempted a recovery early in the Asian session, rising 2 per cent to $29,500, a recovery from a 16-month low of roughly $25,400 on Thursday.
It is still trading well below week-ago levels of around $40,000 and is on track for a record sixth consecutive weekly loss unless weekend activity improves.
“I don’t believe the worst is gone,” Scottie Siu, investment director at Axion Global Asset Management, a Hong Kong-based firm that manages a crypto index fund, said. “I believe there will be further decline in the days ahead”.
“I believe what we need to see is a significant drop in open interest, so that speculators are forced out, and then the market will stabilise”.
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This week, TerraUSD (USDT) lost its 1:1 peg to the dollar, as its method for maintaining stability, which relied on another virtual token, failed under selling pressure.
