Crypto meltdown deepens as stablecoin Tether drops below dollar peg

Crypto meltdown deepens as stablecoin Tether drops below dollar peg

The meltdown in TerraUSD, one of the world's largest stablecoins, sent shockwaves through cryptocurrency markets on Thursday, pushing another stablecoin Tether below its dollar peg and sending bitcoin to 16-month lows.

Cryptocurrencies have been swept up in a sell-off across higher risk assets, which has picked up steam this week as data showed U.S. inflation running hot, deepening investor fears about the economic impact of aggressive central bank tightening.

The sell-off has taken the combined market value of all cryptocurrencies to $1.12 trillion, around a third of where it was last November, based on data from CoinMarketCap, with more than 35% of that loss coming this week.

Bitcoin , the largest cryptocurrency by market cap, hit a low of $25,401.05on Thursday, its lowest level since Dec. 28, 2020. In the past eight sessions, it has lost almost a third of its value, or around $13,000, and is down more than 45% so far this year.

Bitcoin is also down nearly two-thirds from a peak of $69,000 in November 2021.

Bitcoin's correlation with the Nasdaq composite has been on the rise recently and is now up near its all time highest level, based on Refinitiv data. The Nasdaq composite has tumbled around 8% so far