Even by the white-knuckle standards of the cryptocurrency universe, it was a standout week.
An algorithmic stablecoin called TerraUSD crashed from its dollar peg when the complex mechanism designed to ensure the link suddenly turned against it, sucking even the biggest digital assets into a vortex of panicked selling.
By mid-week, the turmoil briefly dragged down the $80bn Tether stablecoin — a giant of the market and a key cog in many transactions — prompting its issuer to reassure investors that all is well.
Exchange-traded products linked to crypto also got hammered, with one tracking the troubled Luna token dropping 99% in a single day.
On Friday, a semblance of calm had returned to crypto markets. But the tally was still steep, with some $270bn of crypto asset market value lost, according to CoinMarketCap, in the most volatile week for Bitcoin since October. Add to that the broader question: What other corners of the crypto universe might soon unravel and cause a market meltdown like this one?
“We were shocked to see that a platform as huge as Terra was shut down. This is unprecedented,” said Mihir Gandhi, a partner at PwC and leader of its payments transformation business in India.
“The world of stablecoins looks worrying.”