.jpg?source=invchron&width=608)
A calamitous week in cryptocurrency markets has once again cast doubt on the long-term viability of the bold new financial sector. A coin that was ostensibly pegged to the US dollar lost almost all its value and bitcoin slipped to a 12-month low even as investors search high and low for inflation hedges.
But those in the sector point to the growing involvement of traditional financial institutions as one reason behind bitcoin’s price decline, and also a sign of the space’s increased maturity compared to a few years ago.
The collapse of ‘stablecoin’ TerraUSD, started early last week. Designed to track the dollar, it broke from its $1 (80p) peg, hitting around 12¢ while its linked cryptocurrency, luna, plunged from around $80 in the first week of May to thousandths of a cent.