Terra’s stablecoin has lost its peg to the dollar and is trading around 5 cents at the moment.
The Block’s editor Frank Chaparro has stated that the ongoing UST crisis is the most destructive wealth event in the history of the cryptocurrency market.
He made this statement during a recent interview with CNBC. When asked about the de-pegging of the UST recently, Chapparo said;
“We did see a big of de-pegging in tether, but I talked with the team, and it seems like that they’re managing. I heard there is pressure to get out of stable coins right now because they are worried about the risk sort of illustrated in UST, which really can’t be understated, right, this event is probably the most destructive wealth event in the history of crypto with probably $50 billion wiped out.”
He added that cryptocurrency investors are also worried about the other stablecoins. Chapparo told CNBC that;
“It’s not surprising that investors are worried about tether and other stablecoins at the moment. But in terms of the broader stable coin market, I talked to tether and they said they basically have a ton of u.s. treasury short-term so it would be pretty easy for them to honor several billion dollars worth of redemption.”
He added that UST is not in a similar boat right now. The project is struggling to get different whales in the market to do a capital infusion topping at least a billion dollars. He said;
“But at this point with UST down as much as it is and luna, the native token of terra, it’s looking a bit bleak, but that isn’t to say that it could happen it’s just a question of when it might happen”
LUNA, the native token of the Terra ecosystem, has lost more than 98% of its value over the past few days and currently trades at $0.06087 per coin.