Bitcoin slips below $30,000 as European regulators renew crypto warnings after Terra Luna crash
The cryptocurrency resumed its slide on Monday, abandoning the gains they had made over the weekend as regulators continue to circle.
European officials reiterated their warnings of the risks posed by cryptocurrencies.
Bitcoin fell 5 percent to around $29,700 (€28,500) in Asian trade on Monday, with stocks slipping on concerns of high inflation and rising interest rates.
The world’s largest cryptocurrency has lost nearly a fifth of its value so far this month, as the spectacular collapse of TeraUSD, a so-called stablecoin, plunged crypto markets amid a widespread sell-off of already risky investments.
TeraUSD, which broke its 1:1 peg against the dollar last week and is currently trading near $0.14 cents (€0.13), according to price site Coingeco, with a special focus on stablecoins and their important role in the crypto system. has attracted.
Some of that attention has come from financial regulators.
The governor of the Bank of France, Francois Villeroy de Galhau, said at a conference on Monday that crypto assets could disrupt the international financial system if they were not regulated and made interoperable in a consistent and fair manner across all jurisdictions.
risk-sensitive stablecoins
He pointed to stablecoins, which he said were misnamed some of the sources of risk.
Speaking separately, European Central Bank executive board member Fabio Panetta also said on Monday that stablecoins were vulnerable to a walk.
Tether, the world’s largest stablecoin, lost its 1:1 peg on May 12 before recovering. Unlike TeraUSD, Tether is backed by reserves in traditional assets, according to its operating company.
On the same day, bitcoin fell to $25,400 (€24,372), its lowest level since December 2020, but reached a high of $31,400 (€30,130) on Sunday.
Ether, the second-largest cryptocurrency, fell 5.6 percent on Monday to nearly $2,000 (€1,919).
Regulators elsewhere are also concerned. The US Federal Reserve warned last week that stablecoins were vulnerable to a investor run because they were backed by assets that could lose value or become liquid during times of market stress.
