By THOUSIF INC
Cryptocurrencies extended their sell-off on Thursday, with Bitcoin falling to its lowest level in 16 months.
A stampede out of so-called stable coins sent shockwaves around broader markets.
The latest blow to Bitcoin and its smaller rival Ether, which has shed more than half its market value this year.
Came from a meltdown this week in TerraUSD, one of the world's biggest cryptocurrencies.
Bitcoin dropped to $25,401.05, its lowest level since Dec. 28, 2020.
In the past eight sessions, it has lost a third of its value, or $13,000, and is down more than 45% so far this year.
From a peak of $69,000 in November 2021, it has lost nearly two-thirds of its value.
TerraUSD, also known as "UST," slipped below its 1:1 peg to the dollar this week, roiling cryptocurrency markets already under pressure alongside tumbling stock markets.
Richard Usher, head of OTC trading at BCB Group, said:
"The collapse of the Peg in TerraUSD has had some nasty and predictable spillovers."
"We have seen broad liquidation in BTC, ETH, and most ALT coins."
The moves are reminiscent of the bank runs during the 2008 financial crisis.
Stablecoins are digital tokens pegged to the value of traditional assets, such as the U.S. dollar.
They are popular in times of turmoil in crypto markets and are often used by traders to move funds around and speculate on other cryptocurrencies.
On Thursday, TerraUSD was quoted at around 50 cents, according to CoinGecko price data.