Crypto: A sell-off hits digital currencies

Is this the end of cryptocurrency?

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The collapse of the cryptocurrency market is testing the faith of those who drank the Kool-Aid, said Katie Martin in the Financial Times. "A trickle in the price of Bitcoin from its peak of $68,000 turned into a flood" last week "in part because of cracks in the so-called stablecoins that glue the market together." Stablecoins, which are generally pegged to the dollar, let digital currency investors move in and out of currencies like Bitcoin without converting their investments into cash. They can also be lent out, often at high rates of interest. A run on these tokens has cast a much wider chill on the crypto market, including Bitcoin, which fell as low as $27,000. Investors were "lured in by claims that these lines of code could become serious rivals to the dollar and the basis of a new financial utopia." Now investors large and small have gotten a serious reality check. Hedge fund manager and crypto evangelist Michael Novogratz has lost $6 billion of his $8.5 billion fortune since November, while New York City Mayor Eric Adams, who converted his first three City Hall paychecks into Bitcoin and Ethereum, would have lost about $5,800 of his pay.

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