Interview: GlobalBlock’s Sotiriou discusses Terra meltdown & Tether contagion

on May 18, 2022
  • Fear has spread through the markets following the collapse of stablecoin UST
  • We interview Marcus Sotiriou on the effects of the meltdown on the industry at large
  • We talk Tether de-pegging, contagion effects, regulatory consequences and what this means for Bitcoin

Fear and panic have spread through the cryptocurrency markets all week following the shocking collapse of the Terra ecosystem. The UST stablecoin, once worth $18 billion, entirely lost its peg and brought Luna down with it – now worthless having once been worth over $42 billion.

The contagion rippled through the markets, with Bitcoin falling into the $20K’s and even the world’s biggest stablecoin, Tether, briefly losing its peg. USDT traded as low as 85 cents at one point, in what turned out to be one of the biggest crash days in crypto’s history. Data Analyst Dan Ashmore sat down with Marcus Sotiriou, Analyst at GlobalBlock, the  UK-based Digital Asset broker that is publicly listed in Canada, to get his thoughts on the fiasco. Sotoriou had previously reported on the Terra crisis, as well as looking into the health of the entire industry amid the subsequent Tether de-pegging.

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Here are some highlights from the conversation:

  • Marcus weighs in on the Tether backing issue, asserting that people are underestimating Bitfinex’s reserves
  • A discussion on the potential contagion effects still to come following the UST collapse
  • Speculation on the exposure of market-makers to the now-collapsed UST
  • The impending regulation of stablecoins and the effect of the UST collapse here
  • Whether the meltdown will damage the cryptocurrency industry as a whole
  • Will there be any impact on the adoption of Bitcoin?

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