By Geoffrey Smith
Investing.com -- Cryptocurrency prices fell to their lowest in weeks on Friday as a stronger dollar and another episode of volatility in a leading stablecoin shook confidence.
By 10:10 ET (14:10 GMT) on Friday, Bitcoin had fallen 8.7% against the dollar to a three-week low of $21,405, while Ethereum had fallen 9% to a two-week low of $1,687.76. Less liquid, alternative coins - as is usual in broad selloffs - suffered even bigger losses, with Dogecoin falling 14%, Cardano down 10% and Solana down 13%.
According to analytics firm Coinalyze, over $605 million in crypto has been liquidated in the last 24 hours.
The move appeared to reflect - at least in part - a shift in U.S. monetary policy expectations, in the wake of the publication of minutes from the Federal Reserve's last meeting that damped hopes that the central bank could soon scale down the pace of interest rate hikes. Comments from St. Louis Fed President James Bullard and his San Francisco and Minneapolis counterparts over the last 48 hours have poured cold water on such hopes.
But the crypto space was also troubled by the latest example of an exchange stablecoin - in this case Huobi's HUSD token - losing its peg to the dollar, if only temporarily. Stablecoins are supposed to trade with minimal volatility, but confidence in such assets has been hit by the collapse of the TerraUSD stablecoin earlier this year, while ongoing rumors about the asset quality of its backing continue to dog Tether , the world's biggest stablecoin by market value.
The dollar-indexed stablecoin of crypto exchange Huobi had 'de-pegged' temporarily on Thursday, falling to as low as 71c before recovering to parity by early Friday in Europe. Huobi wasn't able to give a clear explanation for the incident, saying only that it was "aware" of it.
HUSD is issued by Hong Kong-based Stable Universal, in which Huobi had held a stake until April, according to comments made through the Telegram channel of Huobi community manager Ruly on Thursday.
The volatility incident came only days after Bloomberg reported that Huobi founder Leon Li was in talks to sell a majority stake in the business. It noted FTX owner Sam Bankman-Fried and Tron founder Justin Sun as potential buyers, although it quoted Sun as saying he had held no talks with Li on the subject.
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