‘Others Could Fail’—IMF Issues Stark Crypto Warning After Terra Luna-Led Crash Wiped $2 Trillion From Bitcoin, Ethereum And Crypto Market Price

Bitcoin
Bitcoin
And cryptocurrency prices have regained some ground after an almighty crash that wiped out about $2 trillion from the consolidated crypto market.

apply now Forbes CryptoAsset & Blockchain Advisor Successfully weathering the Bitcoin and crypto market crash

Bitcoin’s price has recovered somewhat after falling below $20,000 per bitcoin last June, but it’s likely to drop at the end of last year as recession fears wreak havoc on the Federal Reserve’s outlook. Ethereum’s price has also bounced back from recent lows after Ethereum co-founder Vitalik Buterin released a surprise Ethereum price prediction.

Now, as the shockwave from the collapse of the terraUSD stablecoin and its supporting cryptocurrency Luna continues to be felt, the International Monetary Fund (IMF) warns that “there are other currencies that could fail.”

Want to stay ahead of the market and understand the latest crypto news? Sign up for free now crypto codex—Daily newsletter for traders, investors and anyone interested in cryptocurrencies

Forbes detailsCoinbase crypto ‘nightmare’ has just begun amid wild Bitcoin and Ethereum price volatilityTo billy bambrough

“We could see further declines in both crypto and risk asset markets such as equities,” said Tobias Adrian, director of financial and capital markets at the IMF. Yahoo Finance in an interview. “Some coin offerings may fail more, especially some of the hardest-hit algorithmic stablecoins, some of which may fail.”

Terra USD
usa
TerraUSD is a so-called algorithmic stablecoin that has grown rapidly in recent months alongside its support coin luna, which is designed to keep the price of terraUSD pegged to the US dollar. It came as the Federal Reserve hiked interest rates and cut back on Covid-era stimulus.

The failure of the Terra ecosystem has sparked intense regulatory scrutiny of the cryptocurrency market, U.S. securities regulators have intensified their pursuit of what they deem unregistered securities, and one top VC said, “This is in the face of the venture community. I predicted it would explode.” Billionaire investor Mark Cuban has warned that a nightmare awaits the cryptocurrency industry.

It appeared that Terra’s problems could extend to other stablecoins, including the two largest Tethers and USDC.
USDC
but they managed to keep up with the surge in redemption requests and held the dollar peg.

SIGN UP NOW crypto codex— Free daily newsletter for those interested in cryptocurrencies

Forbes details“It Will Definitely Happen” – Prince Makes Shocking Crypto Predictions As Bitcoin And Ethereum Prices ReboundTo billy bambrough

Adrian said Tether, which is a mix of cash, money market funds, US Treasury bills, commercial paper, corporate bonds, loans and cryptocurrencies, is “vulnerable because it is not backed one-to-one.” rice field. In May, the issuer of Tether said the stablecoin was partially backed by “non-U.S.” government bonds.

“[Some fiat-backed stablecoins] It is certainly a vulnerability that some stablecoins are not fully backed by assets like cash,” Adrian added.

Last week, the IMF released a report detailing how the cryptocurrency crash “caused huge losses for crypto investment vehicles” and led to “algorithmic stablecoin failures.” The fund said it was confident of a “ripple” to the “broader financial system”. remain restricted.

“What was very concerning in the 2008 crisis was that banks were highly exposed to shadow banking, and at this time we do not see any exposure of banks to shadow banking through crypto.” said Adrian. Yahoo Finance.