Crypto becomes a flood of green

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A sell-off in crypto that no one will ever forget suddenly seems like ancient history. Even as Terra and its stablecoin ecosystem experienced a sickening death rattle, most digital assets are now soaring as of early Friday.

Bitcoin returned above $30,000, Ethereum reclaimed $2K while XRP rallied 20% over 24 hours. What a difference a day makes. BTC tumbled below $27K early on Thursday, but snapped back as the stock market turned a corner with bargain hunters pouncing on the battered tech sector. The Nasdaq eked out a flat session yesterday. Then Asian equities moved higher. And over the past several hours, European markets began to rebound.

At the same time, there's a green parade of altcoins sporting, as of 6:20 a.m. (EST), some audacious 24-hour percentage gains, including ApeCoin (+41%), Quant (+48%), Fantom (+54%), Decentraland (+62%), STEPN (+63%) and Gala (+75%).

The Terra blockchain has officially halted. It's LUNA has fallen to zero. Big exchanges have delisted it.

Meanwhile, Terra's dollar-pegged UST stablecoin has fallen below 20 cents.

LUNA's supply having swollen to 6.5 billion tokens appears for naught. Terra's online communities are now filled with grim posts about losing everything overnight, according to U.Today.

LUNA was $119.18 only one month ago.

Weathering $3 billion in withdrawals yesterday, Tether's USDT briefly surrendered, then promptly reclaimed its dollar peg. Crypto's largest stablecoin coming under pressure, and the decimation of Terra's UST, together sparked intense volatility in markets and renewed fierce debate about the future of digital money.

A singularly essential issue smacked crypto in the mouth. LUNA's value vanished when it lost utility after UST lost its peg, squandering that most precious commodity – trust.

It bears emphasis, as U.S. regulators have pointed out, that stablecoins de-pegging from the dollar are not necessarily a threat to financial stability. They are not yet at such a scale (Cointelegraph).

The total market capitalization of the five largest USD stablecoins is roughly $154 billion, or around 11% of the total crypto market cap, per CoinGecko.

Of those five, Dai (DAI) and Magical Internet Money (MIM) each are pursuing a decentralized path, similar to UST's.

Sang Lee, co-founder of VegaX Holdings, said the industry could use some more decentralized stablecoins to rival the giant centralized ones such as Tether.

“We can’t have one to rule them all," he told Cointelegraph. "That’s what we’re trying to stop in the first place.”

It’s unrealistic to expect the leading stablecoins to become decentralized right away, Lee said. But efforts need to continue in this vein, he said, to solve “a lack of transparency and accountability” in centralized currencies.

Hester Peirce, an SEC commissioner who owing to her advocacy has become known as "crypto mom," has called for a stablecoin regulatory framework that allows for trial and error.

"We need to allow room for failure," she said during an online monetary policy think tank event taking place against the backdrop of the Terra UST/LUNA debacle.

Of paramount importance, of course, is that these stablecoins maintain their pegs.