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Cryptocurrencies resumed their slide on Monday

Bitcoin slips back below $30,000 as European regulators renew crypto warnings after Terra Luna crash

European officials reiterated warnings of risks posed by cryptocurrencies.

Bitcoin fell 5 per cent to around $29,700 (€28,500) on Monday in Asian trade, sliding alongside stocks because of worries about high inflation and rising interest rates.

The world's largest cryptocurrency has lost around a fifth of its value so far this month, as the spectacular collapse of Terra USD, a so-called stable coin, has roiled crypto markets already falling amid a broad selling of risky investments.

The Governor of the Bank of France, Francois Villeroy de Galhau told a conference on Monday that crypto assets could disrupt the international financial system if they were not regulated and made interoperable in a consistent and appropriate manner across jurisdictions.

Speaking separately, Fabio Panetta, member of the executive board of the European Central Bank, also said on Monday that stable coins were vulnerable to runs.

Tether, the world's largest stable coin, briefly lost its 1:1 peg on May 12, before recovering. Unlike Terra USD, Tether is backed by reserves in traditional assets, according to its operating company.

On the same day, bitcoin dropped as far as $25,400 (€24,372), its lowest level since December 2020, but recovered to as high as $31,400 (€30,130) on Sunday.

Ether, the second-largest cryptocurrency, fell 5.6 per cent to around $2,000 (€1,919) on Monday.

Regulators elsewhere are also concerned. The US Federal Reserve warned last week that stable coins were vulnerable to investor runs because they were backed by assets that could lose value or become illiquid in times of market stress.

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