Bitcoin edges past $30,000-mark as traders assess stablecoin fallout

business-standard.com:

Bitcoin edged above $30,000 on Tuesday in cautious trading as the fallout over a collapsed stablecoin continued to keep sentiment in check.

The world’s largest cryptocurrency rose 2% to about $30,500 as of 9:08 a.m. in London. Other coins from Ether to Avalanche also posted modest gains.

Bitcoin is nursing a 21% loss so far in May -- the worst monthly slump in a year -- following last week’s crypto sector turmoil over the collapse of the TerraUSD algorithmic stablecoin, also known by its ticker UST, and Tether’s brief dip from its dollar peg.

“Small amounts of dip buying tentatively gave Bitcoin a boost, but too much of the retail and institutional world still have massive wounds from the recent collapse,” Edward Moya, senior market analyst at Oanda, wrote in a note.

The stablecoin drama has spurred debate about the future for digital assets and the lessons to learn from the collapse of the Terra ecosystem.

Stablecoin “regulation seems likely” and could lower risk, Goldman Sachs Group Inc. strategists Isabella Rosenberg and Zach Pandl wrote in a note. An alternative “government-backed medium” may even displace them, they said.

Investors have fled from cryptocurrencies and stablecoins alike since the crash began. The total circulation of Tether, the largest and most systemically important stablecoin, has dropped by more than $7 billion since May 7 when Terra’s de-peg became apparent, data from CoinGecko show.

Though TerraUSD and Tether’s stablecoins operate differently, the subsequent drop in Tether’s own dollar-peg to 96 cents on May 12 triggered a wave of redemptions, prompting regulators to question whether such assets are suitable for mainstream adoption. During the fiasco, Tether said it would continue to honor