Crypto is now bracing for a Coinbase bombshell after Bitcoin and Ethereum price collapsed
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Lower lows 👇
Cryptocurrency prices fell sharply over the weekend, falling to lows not seen since last summer. Microsoft MSFT billionaire Bill Gates warned yesterday that rising interest rates are likely to lead to a global economic recession, telling CNN that a combination of interest rate hikes and rising commodity prices means “the bears have a pretty strong case in this case, which makes me… very worried”.
That Bitcoin The price fell below $33,000 this morning, down more than 20% in the last 30 days. Ether ETH eum and other major cryptocurrencies are faring even worse, with Ether down 7% since this time yesterday and its closest rivals BNB
BNB , Solana, cardano and avalanche all fall between 8% and 12%.
terrace Luna is struggling to shore up the coin, which itself was designed to support the TerraUSD UST (UST) algorithmic stablecoin, despite efforts by the Luna LUNA Guard Foundation and Terra Labs. See below for details.
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Terraforming 🏗️
Do Kwon, co-founder and chief executive officer of Terraform Labs, pictured in the company’s office … [+]
© 2022 Bloomberg Finance LP
On guard: After Terra’s algorithmic stablecoin TerraUSD (UST) briefly lost its dollar peg over the weekend, the Luna Foundation Guard (LFG) announced this morning that it would lend hundreds of millions of dollars worth of Bitcoin and the stablecoin UST to preserve it. Singapore-based LFG said it would loan $750 million worth of bitcoin to trading firms, as well as $750 million in UST to accumulate bitcoin to stabilize the market.
What happened: UST is believed to have struggled to maintain its dollar peg as large amounts of UST were withdrawn from liquidity pools on the decentralized exchange curve while $192 million of UST was offloaded. In a now-deleted tweet, Do Kwon, the founder of project developer Terra Labs, seemed to imply that the sell-off may have been an orchestrated effort to get UST to lose its tie. Kwon later attempted to reassure the community by posting the loans on Twitter, should not be viewed as an attempt by the LFG to exit their Bitcoin position, but rather as an increase in liquidity around the UST peg. “As soon as the markets recover, we plan to do so [UST] Loan repaid to us in Bitcoin, increasing the size of our total reserves,” Kwon said.
But, but, but… Some aren’t thrilled with the plan, as Bitcoin podcaster Peter McCormack said it “smells like the Fed is buying US bonds in cryptoland.”
crazy people: The price of Terras Luna, designed to help UST maintain this dollar peg, has plummeted over the past week, collapsing 25% and plunging the total value of Luna coins to just $20 billion – just $1.4 billion -dollars more than the UST market cap.
Why it matters: UST relies on Luna to maintain its $1 price through a series of on-chain mint and burn mechanisms. Both UST and Luna have climbed CoinMarketCap’s crypto top ten over the past few months, and UST is one of the largest algorithmic stablecoins.
Background: LFG is a non-profit group formed in January to support the Terra ecosystem and “the sustainability and stability of Terra’s algorithmic stablecoins,” and plans to amass a $10 billion bitcoin-based reserve to be known as support mechanism for the binding of UST . So far, it has bought up around $3 billion worth of Bitcoin. LFG’s Board of Directors includes some of the biggest names in decentralized finance (DeFi), such as Jump Crypto President Kanav Kariya.
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💔 Breaking: Coinbase
📑 Coinbase, arguably the most important crypto exchange and platform, is set to report its first quarter earnings tomorrow and expectations are low (despite bullish predictions from Coinbase Chief Executive Brian Armstrong). Coinbase stock has plummeted along with the bitcoin and crypto markets over the past few months and is now 70% below its market debut.
📉 Desktop and mobile web traffic fell 26% year over year in the first quarter, according to data from analytics firm Similarweb. Mobile app installs fell 67% in March compared to April 2021, the month the company went public.
🏷️ Meanwhile, the reaction to Coinbase’s new non-fungible token (NFT) marketplace has been largely negative. Nick Tomaino of crypto investment firm 1confirmation, who is also a former Coinbase employee, launched a scathing attack on the company via Twitter. I’m not going to make a big move in NFTs next year.”
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The coming week 📆
👀 Keep an eye out for these cryptocurrency and crypto-related events this week.
🤳 Today, Facebook parent company Meta is opening its first Meta Store, a “physical retail space” on its campus in Burlingame, California. Over the weekend Coindesk reported that Metas Instagram will support NFTs from Ethereum, Polygon, Solana and Flow.
– Metaverse is here and Zuckerberg claims leadership with the opening of the Meta Store
🪙 Tomorrow, major US crypto exchange Coinbase will release 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). According to the data, inflation peaked at 8.5% last month.
– “Peak” US inflation signal targeted for turning point in bond market
👨💻 Google’s annual I/O developer conference GOOG also starts on Wednesday.
– Everything we expect at Google I/O 2022
🛡️ On Thursday, the Microsoft Security Summit begins with tech demos and discussions about the modern cyber threat landscape.
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