Ethereum drops to AUD$2,500 following Terra wipe-out
Terra's validators have put the blockchain's operations on hold after Luna's value dropped to under a single cent on 12 May.
- The total market cap of the digital asset industry now stands at AUD$1.77 trillion, down 48% over the past week.
- ETH's dominance index, which measures its market share against other cryptocurrencies, currently lies at 19.2%.
- Prior to its crash, Terra (LUNA) was a top-10 crypto, with its UST stablecoin only trailing Tether (USDT) and USD Coin (USDC).
Ethereum dipped as low as AUD$2,500, its lowest levels in nearly a year, before regaining +9% in value. ETH is now trading at AUD$3,029 while showcasing monthly losses of -31%. Experts believe that ETH needs to climb back up to AUD$3,250 for it to rebound. Continued stagnation around the AUD$2,500 range could result in a crash to AUD$1,950.
More alarming than ETH's performance has been the collapse of Terra. Terra is an open-source blockchain protocol designed to support stablecoins and decentralised apps. The project's native token LUNA has lost more than 97% of its value, dipping below 1 cent earlier today.
The value of UST, Terra's algorithmic stablecoin offering, has also slipped to $0.134. This has caused the market to lose faith in the blockchain completely. The project is now on halt till further notice with an official statement reading:
"The Terra blockchain was officially halted at a block height of 7603700. Terra validators have decided to halt the Terra chain to prevent governance attacks following severe $LUNA inflation and a significantly reduced cost of attack."
The world's largest stablecoin Tether (USDT) also saw its 1:1 dollar peg sway slightly to $0.99 on 12 May but has since stabilised.
Jerome Powell to head the Federal Reserve for another 4 years
The United States Senate confirmed that the Federal Reserve's current chairman Jerome Powell will be holding his position for another 4 years. He won the confidence of the house in a landslide 80-19 vote. Powell has been chairman of the central bank since February 2018.
The Fed is responsible for maintaining interest rates and controlling inflation levels. Since the start of the year, the regulatory body has initiated 2 interest rate hikes, with 5 more to follow over the next 6 months. These decisions have had a major impact on the global economy, with inflation running at record highs all over the world.
Disclosure: The author owns a range of cryptocurrencies at the time of writing.