For a generation of alienated techies, crypto'sall-for-one ethos was its biggest draw. Now panic is spreading across this universe and that same ethosis posing what may be the biggest threat yet to its survival.<\/p>\n
What started this year in crypto markets as a risk-off bout of selling fueled by a Federal Reserve suddenly determined to rein in excesses has exposed a web of interconnectedness that looks a little like the tangle of derivatives that brought down the global financial system in 2008. As Bitcoin slipped almost 70% from its record high, a panoply of altcoins also plummeted. The collapse of the Terra ecosystem a much-hyped experiment in decentralized finance began with its algorithmic stablecoin losing its peg to the US dollar, and ended with a bank run that made $40 billion of tokens virtually worthless. Crypto collateral that seemed valuable enough to support loans one day became deeply discounted or illiquid, putting the fates of a previously invincible hedge fund and several high-profile lenders in doubt.<\/p>\n
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