A crypto vibe shift?

A crypto vibe shift?

This is an audio transcript of the Behind the Money podcast episode: A crypto vibe shift?

Michela TinderaCryptocurrency prices have been dropping since late 2021. But for one week in mid-May of this year, something particularly dramatic happens.

Ethan WuIn crypto, things tend to fall apart pretty quick.

Michela TinderaThat’s Ethan Wu. He co-writes Unhedged. It’s the FT’s daily newsletter about markets and finance.

Ethan WuThe crypto market is turning down. That puts a lot of selling pressure on these currencies, and it creates a generally fragile environment where a little bit of pressure can really cause something to crack, especially if the foundations are themselves not particularly sturdy.

Michela TinderaNow, there’s supposed to be something in the crypto space that doesn’t crack, or at least it’s not supposed to. It’s another type of cryptocurrency known as a stablecoin. The point of a stablecoin is to help crypto investors more easily jump from a traditional currency like dollars or euros into crypto. While cryptocurrencies you might have heard of like bitcoin and ethereum are really volatile. The point of a stablecoin is that it’s always supposed to be a 1 to 1 exchange. Like one stablecoin equals one US dollar. And so during this time,