The cryptocurrency market experiences an unprecedented crash

The cryptocurrency market has crashed this week, with Bitcoin hovering between US$28,000 and US$30,000 over the past two days – less than half the value of the all-time high it reached in November – and Ethereum just over US$2,000, which is also less than half the value of its November peak. A significant portion of the blame goes to a cryptocurrency called TerraUSD.

TerraUSD is one of the largest of so-called “stablecoins”, which means it is supposed to hold a value close to that of a fiat currency – in this case, the US dollar. Cryptocurrency investors see stablecoins as something of a checkpoint in the crypto game, “safe” places to store their investments when not buying into more volatile currencies. And yet, this week, the value of TerraUSD fell to 30 cents at its lowest, and right now it is still just above 80 cents. As FastCompany pointed out, TerraUSD “typically fluctuates by a few thousandths of a percent.”

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