Cryptocurrencies’ collapse likened to run on the banks as value of Terra Luna halves

Cryptocurrencies’ collapse likened to run on the banks as value of Terra Luna halves

Cryptocurrency owners are rushing to withdraw their funds amid a historic market panic that has been likened to a run on banks. The value of so-called “stablecoins”, cryptocurrencies whose values are meant to be pegged to real-world currencies such as the dollar, have slumped as owners lose confidence in them. Terra, whose value is meant to be propped up by software, has fallen from $1 on Monday to around 50 cents, while Tether, the world’s best-known stablecoin, fell to as low as 95 cents on Wednesday, the first time in years it has lost its “peg” to the dollar. Luna, a non-stablecoin cryptocurrency that is designed to support the value of Terra, has fallen by 96pc in the last 24 hours. The crash has raised concerns about the very concept of stablecoins, which are designed to be a safe haven for cryptocurrency owners against the whipsawing price of digital assets such as Bitcoin . The panic has spread into more established cryptocurrencies. Bitcoin fell 10pc in 24 hours to under $27,000, an 18-month low, while Ethereum saw a similar drop. Almost $200bn has been knocked off the value of all the cryptocurrencies in circulation in the last day, according to