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Bitcoin's 2021 gains wiped out in stablecoin rout

The latest blow to Bitcoin and its smaller rival Ether, which has shed more than half its market value so far this year, came from a meltdown this week in TerraUSD, also one of the world's biggest cryptocurrencies

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Bitcoin's 2021 gains wiped out in stablecoin rout
GNN Media: Representational Photo

HONG KONG: Cryptocurrencies extended their sell-off on Thursday, with Bitcoin falling to its lowest levels in 16 months as a stampede out of so-called stablecoins sent shockwaves around broader markets.

The latest blow to Bitcoin and its smaller rival Ether, which has shed more than half its market value so far this year, came from a meltdown this week in TerraUSD, also one of the world's biggest cryptocurrencies.

Bitcoin dropped to a low of $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.

"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," said Richard Usher, head Of OTC trading at BCB Group, adding that 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 around 50 cents, according to CoinGecko price data.

Unlike most stablecoins which are backed by reserves, TerraUSD is an algorithmic, or "decentralised", stablecoin. It was supposed to maintain its peg via a complex mechanism which involved swapping it with another free-floating token.

But even reserve-backed stablecoins, which say they have sufficient assets to maintain their pegs, were showing signs of stress on Thursday.

Major stablecoin Tether slipped below its dollar peg, hitting as low as 98 cents around 0732 GMT on Thursday, according to CoinGecko. USD Coin was trading at around $1.04 while Binance USD was at $1.07 - a significant breakout of its usual range.

"The Terra incident is causing an industry-based panic, as Terra is the world's third-biggest stable coin," said Ipek Ozkardeskaya, a senior analyst at Swissquote Bank. But TerraUSD "couldn't hold its promise to maintain a stable value in terms of U.S. dollars."

Market players are still assessing the fallout of the collapse of TerraUSD to identify whether major companies or investors have been badly hurt. That would be a possible clue to wider contagion.

Ether, the world's second-largest cryptocurrency, tumbled nearly 15% on Thursday to $1,700, its lowest since June 2021.

Unlike previous sell-offs in broad financial markets, when cryptocurrencies have been largely untouched, the selling pressure in these assets this time has undermined the broader argument that they are dependable stores of value amid market volatility.

 

 

SOURCE: REUTERS

 

Adeel Daniel

Adeel Daniel is a Passionate journalist who has many years of diversified experience in print, electronic and digital media. He has previously worked with other renowned TV channels as well as English news papers. Now he is a part of the GNN Network.

Sports

Former Pakistan Pacer Umar Gul Appointed Bowling Coach

The 37-year-old is widely regarded as one of the finest pacers, particularly in T20 cricket

Published by Siddra Sumreen

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Former Pakistan Pacer Umar Gul Appointed Bowling Coach

Kabul: Afghanistan Cricket Board (ACB) has appointed former Pakistan speedster, Umar Gul, for a period of one year. Gul’s first assignment with the Afghanistan side will be on their limited-overs tour of Zimbabwe next month.

The former pacer has earlier worked with the board as a bowling consultant for their three-week training camp held in Dubai in April alongside mate Younis Khan as the batting coach.

However, on seeing his performance with the team, ACB is delighted to announce the extension in the role.

This will be Gul’s first coaching assignment in international cricket after serving as the bowling coach of Quetta Gladiators in the 2021 season of the Pakistan Super League (PSL).

The 37-year-old is widely regarded as one of the finest pacers, particularly in T20 cricket. Gul had an exceptional record in T20Is as he picked up 85 wickets at an average of 16.97 and an economy rate of 7.19 in 60 matches in a T20I career spanning almost 9 years. Gul retired from all forms of cricket in 2019 and has since worked as a coach.

The former pacer has previously coached in Pakistan’s premier T20 tournament, Pakistan Super League (PSL), as a bowling coach for Quetta Gladiators. He has also worked as a coach in the Kashmir Premier League (KPL) and was the head coach of Galle Gladiators in the previous edition of the Lanka Premier League (LPL).

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Pakistan

Pakistan Navy seizes huge cache of drugs in Arabian Sea raid

Pakistan Navy is vigilant to counter any illegal activity and safeguard its maritime borders.

Published by Siddra Sumreen

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Pakistan Navy seizes huge cache of drugs in Arabian Sea raid

Karachi: Pakistan Navy during action in the Arabian Sea foiled a bid to smuggle narcotics worth millions of dollars.

According to PN’s spokesperson, Pakistan Navy Ship DEHSHAT in collaboration with PN air units seized approximately 4500 Kilograms of drugs at the North Arabian Sea. While undertaking maritime security operations, PNS DEHSHAT intercepted the suspicious dhow and recovered a large cache of drugs valued approximately 6.7 million dollars in the international market.

The spokesperson said that the successful operation by the Pakistan Navy in the seizure of a huge quantity of narcotics is a testimony to the fact that Pakistan Navy remains combatted to fulfill national and international obligations and maintaining good order at sea. Pakistan Navy is vigilant to counter any illegal activity and safeguard its maritime borders.

The successful execution of the anti-narcotics operation is a demonstration of the Pakistan Navy's resolve to deter and disrupt illegal activities in the maritime zone of Pakistan, the PN spokesperson said.

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Pakistan

Will not bow before Imran’s dictation: PM Shehbaz Sharif

"If the PTI was merely concerned about the election, they should have come to the parliament."

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Will not bow before Imran’s dictation: PM Shehbaz Sharif

Islamabad: Prime Minister Shehbaz Sharif Thursday vowed not to bow before the dictations of ex-Prime Minister Imran Khan and made it clear that the National Assembly would, not anyone else, would decide the timing of the election.

“I want to make it clear to the head of this gang that none of his dictation will be accepted. This House will decide when to hold fair election,” the prime minister said addressing the National Assembly hours after Pakistan Tehreek-e-Insaf Chairman Imran Khan ended his long march here, giving the government a six-day deadline to announce a fresh election.

The prime minister said if the PTI was merely concerned about the election, they should have come to the parliament.

“Imran Niazi should not have any misunderstanding. There are 14 months (to complete the parliament’s term). We are open to talks. Dialogue is the trait of politicians. I can constitute a committee. But, if you think you will pressurize, blackmail or threaten us to leave the government, keep in mind, we will not bow before your pressure or dictation,” he reiterated.  

He accepted that the country was faced with numerous challenges but the coalition government would try its utmost to steer the country out of the issues it had inherited from the previous government.

Lamenting the riots and destruction caused by the participants of the PTI long march, the prime minister said the House should choose between the course of development or destruction.

Drawing a comparison between the economic growth of the two neighboring countries, he said in 1990s India copied Pakistan’s economic strategy and excelled with its IT exports touching $200 billion against $1.5 billion of Pakistan.

He said the protestors who also carried weapons to bring to the federal capital, also damaged infrastructure here and burnt down the trees despite the party claiming to be the champion of 10 Billion Tree Tsunami.

He also condemned the killing of a police constable in Lahore, sympathized with the grieved family and also announced an assistance package for the policemen who were martyred or injured in the line of their duty.

He said instead of showing some compassion to the widow or orphaned children of the martyred police constable, the PTI leader taunted him.

Calling it a 126-day theatre, the prime minister said the PTI’s sit-in in 2014 had not only impacted the national economy but also claimed the lives of the security personnel.

He told the House that the law enforcement agencies showed maximum restraint to control the situation only by using teargas or rubber bullet. The government also called in the army troops to aid the civilian setup, he added.

He also lauded the performance of the Islamabad Police, Rangers, FC, Islamabad Traffic Police and other departments concerned to protect the lives and properties of the people.

The prime minister said the PTI long march, which was led by Imran Khan from Peshawar and accompanied by KPK chief minister, was in fact an attack at the federation which could not be allowed in any civilized society.

The prime minister said after the nation sacrificed thousands of lives and left many others disabled, the slogan of jihad was raised in Peshawar by the PTI.

“Today, the slogans of jihad were raised in Peshawar. Jihad against whom? The nation needs an answer. They used the religion for personal gains which the House should condemn through a resolution to avert the recurrence of such incidents” he commented.

He said despite the dearth of resources, the previous government reduced the oil prices, leaving behind a “landmine” for the incumbent government.   

The prime minister said during the last three and half years, the PTI leadership did nothing to support the poor, closed PKLI, and ended free medical treatment of hepatitis patients.  

“Does it require any more evidence to believe that he is an enemy of Pakistan,” he remarked.

The prime minister also questioned the PTI leader as to why he announced a long march on May 25 despite knowing that it coincided with the sentencing of Kashmiri leader Yasin Malik by an Indian court.

He said the House was unanimous to condemn the sentence to Yasin Malik and shared the grief of his family, besides reiterating Pakistan’s stance to continue supporting the people of Kashmir for their right to self-determination.

He recalled the PTI’s sit-in of 2014 when the institutions including Pakistan Television was attacked and caused the postponement of Chinese President Xi Jinping which also delayed the signing of the China Pakistan Economic Corridor for seven months.

He said the Chinese firm executing Karot Hydropower project had agreed to provide free electricity to the national grid till the finalization of the Commercial Operations Date which would save Rs4 billion to the national kitty.

He said the previous government wasted three and half years in mere attacking the national institutions including the judiciary and hurling allegations ignoring the sufferings of the people.

“How long this drama will continue? How long this disturbed nation will tolerate it,” he questioned adding the country could not afford the history of the 2014 sit-in to be repeated.

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