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Gulf Today Report
Bitcoin fell below the $27,000 level as the sell-off in the cryptocurrency world continues. Bitcoin price fell almost 9% to $26,848.20 (€25,659) on Thursday, according to data from Coin Metrics.
The Coinbase outage came as Binance, the world’s largest cryptocurrency exchange, suspended trading of Terraform Labs’ Terra (Luna) and TerraUSD (UST) tokens, which crashed 98 per cent, wiping out the life savings of its investors.
The sharp drop comes after the US Bureau of Labor Statistics announced consumer prices for April was stronger than expected, forcing investors to sell riskier assets like cryptocurrencies.
During this time, the price of Ether fell by more than 23%.
The so-called stablecoins are sending shockwaves through the markets, wiping billions of dollars off their value, causing liquid cryptocurrencies like Bitcoin to crash and people’s savings to be lost.
The two main stablecoins of the Terra crypto project have fallen into freefall with some calls the incident is a Ponzi scheme similar to the Lehman Brothers collapse that precipitated the 2008 financial crisis.
Stablecoins claim to be a relatively safe haven in the highly volatile cryptocurrency market.
They are supposed to be linked to a fiat currency and usually hold a 1 to 1 parity with the US dollar.
But recent events have shown that they are just as volatile as other cryptocurrencies.
The world’s second largest cryptocurrency Ethereum joined the cryptocurrency crash, plummeting in value by 20 per cent.