Cryptocurrencies extended their sell-off on Thursday, with Bitcoin falling to its lowest levels in 16 months as a stampede out of so-called stablecoins sent shockwaves around broader markets.

The world’s largest cryptocurrency dropped to a low of $25,401.05, its lowest level since Dec. 28, 2020. In the past eight sessions, Bitcoin has lost a third of its value, or $13,000, and is down more than 45% so far this year.

From a peak of $69,000 in November 2021, it has lost nearly two-thirds of its value. The latest blow to Bitcoin and its smaller rival Ether , which has shed more than half its market value so far this year, came from a meltdown this week in TerraUSD, also one of the world’s biggest cryptocurrencies.

TerraUSD, also known as “UST”, slipped below its 1:1 peg to the dollar this week, roiling cryptocurrency markets already under pressure alongside tumbling stock markets. “The Terra incident is causing an industry-based panic, as Terra is the world’s third-biggest stable coin,” said Ipek Ozkardeskaya, a senior analyst at Swissquote Bank. But TerraUSD “couldn’t hold its promise to maintain a stable value in terms of U.S. dollars.”

Stablecoins are digital tokens pegged to the value of traditional assets, such as the U.S. dollar. They are popular in times of turmoil in crypto markets and are often used by traders to move funds around and speculate on other cryptocurrencies.

TerraUSD’s collapse reverberated through the wider markets, with other stablecoins, such as Tether, also coming under pressure. On Thursday, TerraUSD was quoted at 56 cents and Tether at 95 cents, below their $1 peg levels, according to CoinMarketCap, an exchange.

Market players are still assessing the fallout of the collapse of TerraUSD to identify whether major companies or investors have been badly hurt. That would be a possible clue to wider contagion.

Ether, the world’s second-largest cryptocurrency, tumbled nearly 15% on Thursday to $1,700, its lowest since June 2021.

Unlike previous episodes of sell-offs in broad financial markets, when cryptocurrencies have been largely untouched, the selling pressure in these assets this time has undermined the broader argument that they are dependable stores of value amid market volatility.

“The crypto sell-off has been driven by the daunting macro backdrop of rising inflation and interest rates that has sent shockwaves through the tech sector, dragging cryptos down with it, confirming that Bitcoin and others serve little purpose as a hedge against inflation,” said Victoria Scholar, head of investments at Interactive Investors.