Where Did Over $200 Billion Disappear From the Cryptocurrency Market?

According to estimates from CoinMarketCap, a massive cryptocurrency sell-off wiped more than $200 billion from the market in just 24 hours. The drop in cryptocurrency prices was triggered by the collapse of the stablecoin TerraUSD, which had a significant impact on major tokens. Over the past day, Bitcoin fell by 10% to its lowest level since December 2020, while Ethereum dropped by 16%.

Bitcoin and Ethereum Price Decline

The situation worsened on Thursday as Asian crypto-related stocks plummeted. Hong Kong fintech company BC Technology Group Ltd. lost 6.7% in value. Japanese company Monex Group Inc., which owns the trading platforms TradeStation and Coincheck, ended the day with its shares down 10%.

As central banks around the world aggressively tighten monetary policy to fight inflation, digital tokens have come under pressure from sellers eager to offload risky assets. S&P 500 futures lost 0.8% in the MSCI AC Asia Pacific Index.

Market Volatility and Quick Recovery

However, cryptocurrency investors are no strangers to sharp market swings. As of 4:45 PM Hong Kong time, Bitcoin and Ethereum quickly pared their losses, down 4.2% and 9% respectively.

Previous Incidents

Previously, we wrote about a $13.4 million cryptocurrency theft. According to researchers, an unknown attacker exploited a vulnerability in a flash loan to carry out the theft.