In a recent interview, Mike McGlone, a Senior Commodity Strategist at Bloomberg Intelligence (Bloomberg’s research arm on the Bloomberg Terminal”), shared his thoughts on the collapse of $UST.
Speaking in an interview with Cointelegraph, McGlone said the $UST price collapse was a warning to the rest of the crypto industry on the dangers of algorithmic stablecoins. $UST, which most investors originally thought to be pegged to the value of $1, underwent a price collapse that tanked the crypto markets across the board.
As reported by The Daily Hodl, McGlone said,
One thing that’s notable here is [that] this is part of the ebbing tide of risk assets… when the tide goes out, you see who’s wearing clothes, and we found out algorithmic stablecoins that are based on a market that needs to go up weren’t the best idea.
McGlone called algorithmic stablecoin TerraUSD’s collapse “unfortunate” but not unexpected, given the bubble-like conditions of the crypto markets. The Bloomberg analyst said that Terra’s fall is “what we’ve been expecting and hoping for,” noting that the market needs to purge overextended cryptoassets which have ballooned over the last two years.
McGlone pointed to Shiba Inu ($SHIB) and Dogecoin ($DOGE) as two “ridiculous” examples of crypto excess. He pointed out that flushing the crypto market of nonsense projects would result in crypto getting back to “really building the foundation” that would ultimate transform technology and finance.
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