Bitcoin, the world’s largest cryptocurrency, has fallen more than 50 percent since setting an all-time record of nearly $ 69,000 in November.

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The two main tokens from the struggling crypto project Terra are already in free fall.

The UST, the so-called stable coin, which is designed to maintain a fixation of 1 dollar, fell more than 60% on Wednesday compared to 24 hours earlier. According to CoinGecko, it traded for only 35 cents at 4 am ET.

Sister token luna fell more than 80% to $ 5.

Other cryptocurrencies fell with them, with bitcoin sinking 5% to $ 30,321 and ether falling 4% to $ 2,286.

Stable coins are similar to bank accounts for the crypto economy, offering stable storage of value to avoid the kind of instability that cryptocurrencies like bitcoin have become known for – at least in theory.

UST, the world’s third-largest stablecoin, uses a sophisticated token digging and burning system to adjust supply and stabilize prices. Its price has collapsed under the pressure of the sale of cryptocurrencies recently, which has led to additional panic in the market.

Until Kuon, the creator of the coin, has amassed billions of dollars worth of bitcoins through his Luna Foundation Guard to support the UST during the crisis. The fear now is that the Luna Foundation Guard is dropping these bitcoins on the market, leading to an even bigger sell-off.

Bitcoin briefly fell below $ 30,000 on Tuesday, its lowest level since July 2021. The world’s largest digital coin is now hovering just above that level. It has fallen about 56 percent since setting an all-time record of nearly $ 69,000 in November.

David Moreno Darokas, a research analyst at CryptoCompare, said the situation underscores the “fragility” of algorithmically stable coins such as the UST.

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“UST has become an integral and controversial part of the crypto ecosystem,” he said.

The phenomenon is still relatively new. But UST has grown to become a major player in the crypto economy, with circulating supplies of nearly 17 billion tokens.

Investors are now watching closely how the Luna Foundation Guard reacts to support its diseased stable coin. Kuon said on Tuesday that he was “close to announcing a UST recovery plan”. “Hold on,” he tweeted.

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