Return to the negative sign for cryptocurrencies that on Monday erase the profits of the weekend, after European officials reiterated their warnings about the dangers posed by crypto.
In particular, the Bitcoin slides 5% to $ 29,700. Since the beginning of the month, the most popular cryptocurrency has lost about a fifth of its value, as the dramatic collapse of TerraUSD has created shocks in the cryptocurrency market.
The TerraUSD, which broke the 1: 1 link with the dollar last week and is currently trading close to 14 cents, according to the coingecko website, has caught the attention of investors in stablecoins and the important role they play in the cryptocurrency market. Several financial regulators have now turned their attention to stablecoins.
The governor of the Bank of France Francois Villeroy de Galhau told a conference on Monday that cryptocurrencies could cause upheaval in the international financial system if they are not subject to regulatory rules. He even described the name of stablecoins as “wrong” and pointed them out as a source of risks.
Tether, the largest stablecoin in the world, temporarily lost the peg 1: 1 on May 12, before recovering. Unlike TerraUSD, Tether is backed by stocks of traditional assets. On the same day, Bitcoin fell to $ 25,400, its lowest level since December 2020, but recovered to $ 31,400 on Sunday.
To Ethereumthe second largest cryptocurrency in the world, loses 5.6% with its price hovering around $ 2,000.
The US Federal Reserve warned last week that stablecoins are vulnerable to investor raids because they are backed by assets that could lose value or become unrealizable in times of market pressure.
Source: Capital
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