The cryptocurrency with the largest market capitalization has dropped nearly 70% from its all-time high of around $ 69,000 last November.
“Cryptocurrency assets have seen a dramatic sell-off that has caused huge losses in cryptocurrency investment vehicles and the failure of algorithmic stablecoins and cryptocurrency hedge funds, but the effects on the financial system in general have so far been limited.“Said the IMF.
The panel referred to the collapse of the Terra blockchain with its “algorithmic stablecoin” comment. Terra was popular with cryptocurrency traders until May, when its UST algorithmic stablecoin lost its dollar peg and billions of dollars of investment disappeared. Many investors were exhausted and the contagion of the Earth collapse spread to other segments of the cryptocurrency market.
Since then, institution after institution, from the Bank of England to the Federal Reserve, they have criticized the idea of stablecoins and attempted to regulate them. However, there has been no news on the matter. Vice President of the Federal Reserve, Lael Brainardsaid earlier this month The disappearance of Terra “evokes the classic bullfights of history” and that new technologies would not necessarily protect investors from the same risks.