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Cryptocurrency prices have moved sharply lower over the weekend, falling to lows not seen since last summer. Microsoft
The bitcoin price has this morning dropped to under $33,000, down more than 20% over the last 30 days. ether
Terra’s luna is struggling despite moves from the Luna
On guard: After Terra’s algorithmic stablecoin TerraUSD (UST) briefly lost its dollar peg over the weekend, the Luna Foundation Guard (LFG) has announced this morning it will lend out hundreds of millions of dollars worth of bitcoin and the stablecoin UST in order to maintain it. The Singapore-based LFG said it would loan $750 million worth of bitcoin to trading companies as well as $750 million in UST to accumulate bitcoin in an attempt to stabilize the market.
What happened: It’s thought UST struggled to maintain its dollar peg due to large quantities of UST being withdrawn from liquidity pools on decentralized exchange Curve, while $192 million of UST was dumped. In a now-deleted tweet Do Kwon, the founder of the project’s developer Terra Labs, seemed to hint that the sell-off may have been an orchestrated effort to make UST lose its peg. Kwon later sought to reassure the community, posting to Twitter the loans shouldn’t be seen as LFG trying to exit its bitcoin position but rather increasing the liquidity around the UST peg. “As markets recover, we plan to have the [UST] loan redeemed to us in bitcoin, increasing the size of our total reserves,” Kwon said,
But but but… Some aren’t keen on the plan, with bitcoin podcaster PeterMcCormack saying it “smells like the Fed buying US bonds in crypto land.”
Lunatics: The price of Terra’s luna, designed to help UST maintain that dollar peg, has collapsed over the last week, crashing 25% and plunging the total value of luna coins to just $20 billion—a mere $1.4 billion more than the UST market capitalization.
Why it matters: UST relies on luna to keep its price of a dollar via a set of on-chain mint and burn mechanisms. Both UST and luna have surged into the CoinMarketCap crypto top ten over recent months and UST is one of the largest algorithmic stablecoins.
Background: LFG is non-profit group that was formed in January to support the Terra ecosystem as well as “the sustainability and stability of Terra’s algorithmic stablecoins” and plans to accumulate a $10 billion bitcoin-based reserve intended to serve as a support mechanism for UST’s peg . So far, it’s bought up around $3 billion worth of bitcoin. LFG’s governing council includes some of the biggest names in decentralized finance (DeFi), such as Jump Crypto president Kanav Kariya.
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Coinbase, arguably the most important crypto exchange and platform, will report its first-quarter earnings tomorrow and expectations are low (despite bullish predictions from Coinbase’s chief executive Brian Armstrong, Coinbase stock has crashed along with the bitcoin and crypto market over the last few months and is now down 70% from its market debut.
Desktop and mobile-web traffic has plunged 26% in the first quarter from a year earlier, according to data collected by analytics company Similarweb. Mobile app installs in March were down 67% from April 2021, the month the company went public.
️ Meanwhile, reaction to Coinbase’s new non-fungible token (NFT) marketplace has been broadly negative. Nick Tomaino of crypto investment firm 1confirmation, who’s also former Coinbase employee, launched a scathing attack on the company via Twittersaying the current Coinbase’s current NFT platform “is not it” and promising to sell all his Coinbase shares “if the company doesn’t make a strong move in NFTs in the next year.”
The week ahead
Look out for these cryptocurrency and crypto-related events this week.
Today, Facebook parent company Meta will open its first Meta Store, a “physical retail space” on its campus in Burlingame, California. Over the weekend, Coindesk reported Meta’s Instagram will support NFTs from ethereum, polygon, solana and flow.
Tomorrow, major US crypto exchange Coinbase will post its first-quarter results amid a severe market downturn.
Wednesday brings the latest US inflation data in the form of the consumer price index (CPI). The data is expected inflation peaked last month at 8.5%.
Also Wednesday, Google’s
️ On Thursday, Microsoft’s Security Summit kicks off, featuring tech demos and discussions on the modern-day cyber threat landscape.
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Credit: www.forbes.com /