SINGAPORE, (Reuters) – Cryptocurrencies suffered large losses Friday. Bitcoin was pinned at $30,000, setting a new record for losing streaks. This happened after TerraUSD collapsed, a stablecoin.

On the back of rising inflation fears and a wide-spread sale of high risk investments, crypto assets were also seized. However, sentiment is fragile as the tokens that were supposed to be tied to the dollar are no longer valid.

The largest cryptocurrency in total market value was. It attempted to bounce during the Asia session. It rose by 2% to $29,000. This is a significant recovery after a low of $25,400 on Thursday.

This is still quite a distance below the $40,000 levels from the week before and is on track for another record-breaking weekly loss unless weekend trade picks up.

Scottie Siu (investment director at Axion Global Asset Management in Hong Kong) said that “I don’t believe the worst is over.” She also runs a crypto-index fund.

“I believe that there are more negatives in the days ahead. We need to see the open interest decline more so that the speculators can really get out, then I believe the market will stabilise.”

The USDT-listed TerraUSD broke the 1:1 peg it had to the dollar as selling pressure forced its system for stability, which was using another digital token. It traded at 10 cents last week.

The biggest stablecoin (and one whose developers state is backed in dollar assets) -, fell to 95 cents Thursday according to CoinMarketCap data.

UNSTABLE

Since November, sales have roughly doubled the market value of cryptocurrency worldwide. But the panic has turned to fear in recent sessions due to the squeeze on stablecoins.

These tokens are tied to traditional assets and can be used to move money from cryptocurrencies to fiat cash or convert existing balances.

Analysts at Morgan Stanley Research note: (NYSE-)

The market must have confidence in these stablecoins that they are liquid and able to be sold during market stress.

Tether is now parity with the dollar, and the operating company claims it has sufficient assets in Treasuries and cash.

However, it will face additional tests if traders sell. Analysts are worried that financial stress might spill into the money markets if more liquidation is required.

Ether (the second-largest cryptocurrency according to market capitalisation) remained near $2,000 after falling as low at $1,700 on Thursday. Bitcoin and ether have fallen 60% from record levels reached in November.

Stocks related to crypto-related investments have taken a beating too, with Coinbase’s shares steadying overnight and falling by half within a week.

The Asia-listed Huobi Technology, listed in Hong Kong, and BC Technology Group which operates trading platforms and crypto services, are expecting weekly drops greater than 15%.

Nomura announced on Friday, amid the chaos, that it was offering clients bitcoin derivatives. This is the latest entry by an established financial institution to the asset class.