Terra, Celsius And 3AC Crashes Are More Catastrophic Than FTX’s – Report
The catastrophic collapse of the Terra stablecoin, which was pegged to the dollar, posed a greater risk than the recent FTX crash.
Also, the Celsius and Three Arrows Capital (3AC) firms wreaked more havoc in the crypto space and incurred massive losses.
Terra Crash Left The Market In Shambles
Many would argue that the collapse of the FTX exchange was the worst thing to happen to the crypto space, but this would be incorrect in light of other crashes that occurred concurrently or before.
According to the market, the FTX crash was not the event that destroyed the market. The only crash worthy of that title was the crash of the Terra stablecoin, which was pegged to the US dollar.
The crash of Celsius, the crypto lending firm, and Three Arrows Capital would take second place.
Terra UST, which was previously classified as a safe haven for investors fleeing asset volatility, became the villain overnight.
The stablecoin pegged to the dollar abruptly depegged and fell below 1000% of its original value.
Investors who pumped a lot of money into this stablecoin to protect it from crypto volatility market tides awoke to peanuts. This single event shook the entire crypto market, wreaking havoc on trading volume, market capitalization, exchanges, firms, and virtually everyone in the market space.
The Dreaded Crypto Winter
That event ushered in the grossly thickened crypto winter, followed by the bear season, with prices plummeting; Bitcoin, dubbed the “Saviour,” also struggling for survival, and other tokens losing value, and were out of the market in no time.
As if the Terra crash wasn’t bad enough, the liquidation of two platforms, Celsius and Three Arrows Capital, rocked the matket causing even more price drops. The crypto market was just beginning to recover from these crashes and disasters when a new entry was made: the FTX crash.
The FTX exchange was said to be experiencing a liquidity issue, which was evident from their proof of reserves and the interactions between the FTX and other exchanges.
However, FTX was liquidated in the blink of an eye, allegedly due to the exchange diverting user funds for its sister exchange, Alameda Research.
Investors lost $20.5 billion as a result of the collapse of the Terra UST stablecoin, according to Chinalysis, a crypto analytic company. While the 3AC and Celsius collapse cost investors more than $33 billion. The FTX crisis only saw a realized loss of $9 billion in comparison to these two catastrophes.
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