“Panic effect” in the stock market has also affected the cryptocurrency sector. In addition, the sharp drop in the Terra token (LUNA) since its departure from its peg to the dollar has reduced the value of the entire sector.

Bitcoin, etherium, BNB, XRP, Cardano, Solana, Avalanche … All are in decline.

Bitcoin’s price has fallen to a 2-year low again.

Terra, the cryptocurrency designed to support the UST steblicoin peg to the US dollar, has lost nearly 90% of its value over the past week as traders began dumping the cryptocurrency.

“The cryptocurrency market is under pressure due to macroeconomic events (monetary tightening, rising inflation, conflict in Ukraine) and the correlation between bitcoin and global equities is high,” Jaime Baeza, CEO of cryptocurrency hedge fund ANB Investments, told Forbes. – However, the recent drop in cryptocurrency prices has more to do with the UST reversal than anything else.”

UST, which was the largest algorithmic stablecoin by volume in terms of its market value, had a market capitalization of about $18 billion last week. On Saturday, it began losing parity with the dollar and is slowly approaching zero.

“This has accelerated the sell-off in the broader cryptocurrency market as panic spreads and a systemic risk event, the so-called black swan, approaches,” Baeza noted.