Singapore, Hong Kong, London /
Cryptocurrencies were suffering heavy losses, with bitcoin back above $30k but still suffering a record losing streak after the collapse of TerraUSD, one of the so-called ‘stablecoin’ or stable cryptocurrenciesspread through the markets.
The crypto assets they have also been dragged down by the general sale of risky assets due to concern about the high inflation and the rise of the interest rates. Sentiment is especially fragile, with reportedly dollar-pegged tokens falling.
Bitcoin, the largest cryptocurrency by total market value, managed to rebound in the Asian session and was trading around $30,500recovering a bit from the 16-month low of around $25,400 reached yesterday.
Nonetheless, it remains well below levels a week ago, which hovered around $40k, and barring a rally in weekend trading, it is headed for a seventh straight weekly loss.
“I don’t think the worst is over,” he said. Scottie Siu, investment director of Axion Global Asset Managementa firm based in Hong Kong which manages a cryptocurrency index fund.
“I think there will be more declines in the next couple of days. I think what we need to see is open interest (pool of pending derivative contracts to be settled) plummet much more, until the speculators are really out, and that’s when I think that the market will stabilize,” he added.
Cryptocurrency-related stocks have taken a hit. Those at brokerage Coinbase stabilized overnight but were still racking up losses in just over a week.
In Asia, Huobi Technologywhich is listed on Hong Kong, and BC Technology Groupwhich operates trading platforms and other crypto services, were seeing weekly drops of more than 20 percent.
However, the financial markets have generally seen little repercussion so far from the drop in cryptocurrencies.
“Cryptocurrencies are still very small and their integration into the broader financial markets is still infinitesimal,” said James Malcolm, head of currency strategy at UBS. “This idea that what happens in crypto stays in crypto…in many ways that’s where we’re still at right now.”