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Cryptos Today: Bitcoin Drops Below $28K, Altcoins Plunge 30%, Tether Loses Parity with the Dollar

The crypto market continues to decline this Thursday (12), with Bitcoin (BTC) reaching the level of $ 27,700, its lowest value in 16 months and, despite managing to recover slightly, it maintains a strong fall.

By 7 am, the world’s largest cryptocurrency was down almost 12%, quoted at $27,800, in an even worse scenario for altcoins, known to be more volatile and therefore riskier. Among the 10 cryptos with the highest market value, all register significant losses, which reach 30%.

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“It is a very nervous time in crypto markets following the collapse of the controversial stablecoin UST and most institutional crypto investors who invested in the past year are now losing money,” Edward Moya, senior market analyst at Oanda Americas, said in a note.

According to experts, the liquidation promoted by the Terra project (LUNA), which deposited at least $1.5 billion in BTC in exchanges to try to save itself in recent days, is an important part of this sharp drop in prices. Yesterday, the token even hit losses of 96%, before being able to recover a little.

The market was already coming from a negative moment after the interest rate hike in the United States last week, but it worsened after the experimental system of the stablecoin Terra USD (UST), which uses the Luna token to be generated, created a phenomenon known as a “spiral of death”.

Afraid that the stablecoin would lose parity with the dollar, investors began to dispose of the asset in droves, suddenly increasing Luna’s supply on the market and causing the asset’s price to plummet.

Fearing an even stronger drop, Luna investors began to liquidate positions, adding to the selling pressure that was then driven by Bitcoin’s pullback. The result was a systemic decline in the two assets, which are interlinked.

Meanwhile, Ethereum (ETH) has led futures market settlements in the last 24 hours, while the crypto market as a whole has lost 16% of its total market cap.

Liquidations occur when an exchange forcibly closes a trader’s leveraged position as a safety mechanism due to a partial or total loss of initial margin. This is mostly true in futures trading, which only tracks asset prices, as opposed to spot trading, where traders own the real assets.

Ether futures traders lost $333 million in liquidations as the asset tumbled to fall below the $1,900 level. This was the highest value among all cryptocurrencies, with Bitcoin futures at a loss of $330 million and LUNA futures racking up a loss of $130 million.

To top it off, the world’s largest stablecoin by market cap, Tether (USDT) also lost its parity as it dropped to $0.97 overnight.

According to analysts, traders sold USDT for dollars amid bad sentiment for stablecoins in the cryptocurrency communities, after the whole crisis with TerraUSD, which also showed impacts on Waves stablecoin USDN (WAVES).

Despite this, CoinDesk confirmed with Tether that redemptions continue as normal this morning. “Tether continues to process redemptions as normal amid some expected market panic following yesterday’s case,” a Tether spokesperson said. “Tether has not and will not refuse redemptions to any of its customers, which has always been its practice.”

  • Watch: Bitcoin’s new fall is an opportunity or a trap? How to deal with the bear market

Check out the performance of the main cryptocurrencies at 7 am:

cryptocurrency Price Change in the last 24 hours
Bitcoin (BTC) US$ 27,826.23 -11.92%
Ethereum (ETH) US$ 1,900.77 -21.50%
Binance Coin (BNB) US$ 252.68 -19.24%
XRP (XRP) US$ 0.3697 -28.19%
Cardano (ADA) US$ 0.4402 -32.09%

Cryptocurrencies with the biggest gains in the last 24 hours:

cryptocurrency Price Change in the last 24 hours
EarthUSD (UST) US$ 0.5253 +14.41%
Axie Infinity (AXS) $23.78 +10.88%
PAX Gold ([ativo=PAXG]) US$ 1,864.62 +0.66%

Cryptocurrencies with the biggest drops in the last 24 hours:

cryptocurrency Price Change in the last 24 hours
Earth (MOON) US$ 0.1182 -97.39%
eCash (XEC) US$ 0.00002974 -45.96%
Fantom (FTM) US$ 0.2627 -41.99%
The Graph (GRT) US$ 0.1334 -39.87%
Gala (GALA) US$ 0.05791 -39.83%

Check out how cryptocurrency ETFs closed on the last trading session:

ETF Price Variation
Hashdex NCI (HASH11) BRL 27.18 -6.27%
Hashdex BTCN (BITH11) BRL 36.00 -7.21%
Hashdex Ethereum (ETHE11) BRL 32.25 -8.92%
Hashdex DeFi (DEFI11) BRL 26.20 -7.61%
Hashdex Smart Contract Platform FI (WEB311) BRL 24.77 -17.54%
QR Bitcoin (QBTC11) BRL 9.60 -6.70%
QR Ether (QETH11) BRL 8.05 -7.47%
QR DeFi (QDFI11) BRL 4.70 -6.18%

See the main news from the crypto market this Thursday (12):

Australian cryptocurrency ETFs debut with low volumes

Three cryptocurrency exchange-traded funds (ETFs) opened for investors in Australia on Thursday, with a slow start attributed to market slump momentum, with Bitcoin hitting its 16-month low.

Cosmos Asset Management ETF, which invests in Bitcoin through the Canadian Purpose Bitcoin ETF, recorded $250,000 in trading volume in the first hour before hitting $400,000 overnight in Brazil.

The 21Shares Bitcoin ETF had similar volumes, while the 21Shares Ethereum ETF had around $150K in the first hour of trading. Volumes were well below the expected capital inflow of $1 billion for these ETFs.

Citadel Securities, BlackRock and Gemini deny involvement in the UST collapse

Amid the collapse of the Terra USD stablecoin, social media has been flooded with theories that large financial institutions could be involved in the situation, similar to what happened with GameStop shares, which suffered a short squeeze at the height of the meme case. stocks

But as soon as the matter began to surface, companies like Citadel Securities, BlackRock and Gemini rushed to deny any involvement in the case.

While BlackRock manages cash reserves for USDC, it said in a public statement that it does not trade UST. Likewise, Citadel Securities has publicly stated that it does not trade stablecoins. Gemini said in a tweet that it did not take out any loans as it appeared in some conspiracy theories.

The leading theory that surfaced on the internet alleges that BlackRock and Citadel borrowed 100,000 bitcoins from Gemini and exchanged 25% for UST. Then the two companies dumped UST and BTC, bringing Luna and the Bitcoin price down.

How far will cryptocurrencies go? What’s the best way to buy them? We have prepared a free class with step by step. Click here to watch and receive InfoMoney’s cryptocurrency newsletter

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