TORONTO (Barrio) – Bitcoin fell below $26,000 for the first time in 16 months, amid a broader sell-off in cryptocurrencies that erased over $200 billion from the entire market in a single day.

The price of bitcoin plunged as low as $25,919.33 Thursday morning, according to Bitstamp data. That marks the first time bitcoin has sunk below the $27,000 level since Dec. 26, 2020.

Ether, the second-biggest digital currency, tanked to as low as $1,719.73 per coin. It’s the first time the token has fallen beneath the $2,000 mark since July 2021.

Ether was last down 20% at a price of $1,941.09.

Also weighing on traders’ minds is the downfall of embattled stablecoin protocol Terra.

TerraUSD, or UST, is supposed to mirror the value of the dollar, but it plummeted to less than 30 cents Wednesday, shaking investors’ confidence in the so-called decentralized finance space.

Stablecoins are like the bank accounts of the barely regulated crypto world. Digital currency investors often turn to them for safety in times of volatility in the markets.

But UST, an “algorithmic” stablecoin that’s underpinned by code rather than cash held in a reserve, has struggled to maintain a stable value as holders have bolted for the exit.

As of Thursday morning, UST was trading at about 54 cents, still well below its intended $1 peg.

Luna, another Terra token that has a floating price and is meant to absorb UST price shocks, erased 97% of its value in 24 hours and was last worth just 5 cents — even less than UST.

Source: CNBC