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2022-08-09 19:50:41
Market situation
Bitcoin is back around $30,000. Altcoins rose slightly.
US stocks fell slightly on Nasdaq and S&P 500, while Dow Jones was mostly flat. Stock futures are trending slightly higher in all three indexes. Oil fell insignificantly and remained at a high of $113 per barrel. Gold held at 1824 USD/ounce.
The Fear and Greed Index in both the stock and crypto markets is at extreme fear levels.
Investor fear in the crypto market has been comparable to that of the March 2020 outbreak or the crypto winter of 2018 even though the price is now many times higher than those times.
The US Nasdaq index is similar. Prices have not fallen as sharply as the financial crisis of 2007-2008, but investor fear in the market has been comparable to when the crisis occurred.
Currently, the correlation between BTC and the Nasdaq index is also high and positively correlated. So stock market fluctuations also affect BTC and crypto.
Amazon founder Jeff Bezos has been involved in a Twitter controversy with President Joe Biden over his approach to rising inflation. The exchange began on Friday when Biden tweeted without directly mentioning Amazon: “You want to reduce inflation? Make sure the wealthiest corporations pay them fairly. “
Jeff Bezos responded by arguing that there is no link between inflation and corporate taxes. At the same time, the $1.9 trillion support package for the American people, signed into law by President Biden in March last year, contributed to inflation. Bezos also asserts that inflation is most harmful to the poor.
The next moves of the Fed are also monitored in the upcoming June meeting. Investors have been prepared for the fact that the Fed will raise interest rates by 0.5%, so it may not affect the market much if interest rates still increase as expected.
People are afraid of BTC collectors
Plan B shared on Twitter that the BTC bull season is over and the market is starting to go into winter. Many people are gradually becoming more pessimistic with the market.
However, the investment funds that Coinshare statistics have had a strong week of increasing capital into crypto.
This past week, digital asset investment products saw weekly inflows totaling $274 million last week. A strong signal that investors viewed the recent drop as a buying opportunity in low-priced crypto.
Among cryptos, Bitcoin has the largest inflow with a total of 299 million USD showing that investors are prioritizing the crypto with the safest.
The investment fund that pours the most capital is the Purpose fund, the Canadian Bitcoin ETF. This is a sign that investors in Canada are gathering low-priced BTC. Or maybe the new Bitcoin ETF in Australia buys shares of Purpose for its fund.
Another good news from Benjamin Cowen’s share shows that wallets rank 104 to 113 on the list of wallets with the most BTC buying BTC. These wallets have had time to buy BTC in the lowest drops when BTC hit the 2018 and 2021 lows and including the last drop. Like the recent drop, these wallets have collected and transferred to wallets a large amount of BTC within the past few days. In the past, after buying and losing of these wallets, the market has prospered.
During periods of falling prices, there is a time when BTC on exchanges increases. However, the number of BTC on exchanges quickly dropped after that.
On-chain data also shows that BTC is largely withdrawn from the exchange than deposited.
It can be seen that although the general market sentiment is extremely fearful, there are still investors who are quietly collecting low-priced BTC. Especially the large BTC wallets that have averaged prices for a long time.
Do Kwon LUNA’s New Proposal
Before the UST depreciated, the Luna Foundation Guard (LFG) disclosed the assets currently held to investors after the UST and LUNA incident.
A day later, the UST price dropped and a series of events led to the LUNA being printed very large to rebalance the value of UST but still could not be saved. LFG had to sell off their holdings such as BTC, USDC and USDT to support the price of the UST coin.
However, LFG’s efforts did not help UST regain the price to 1 USD. After that, they had to sell most of their BTC to switch to support UST. Next, they changed UST to LUNA to hold a large amount of LUNA to avoid letting others hold a high percentage and possibly attack the system because this is a share network.
Up to now, LFG has only more than 300 million USD of remaining assets, most of which are UST and LUNA. So their actual assets are still very small.
With the existing assets, LGF also made some suggestions to handle the current situation. One proposal put forward by the LFG is to set aside the remaining funds to partially compensate some UST holders.
Another proposal put forward by PersianCapital has many supporters. This person pointed out that there are currently more than 256 thousand wallet addresses on Terra Anchor Protocol. In which, the 1000 largest wallet addresses hold 82% of the total amount of UST. And the smallest wallet address in 1000 wallets is holding 955 thousand UST. From this statistic, PersianCapital proposes that LFG use the remaining amount to compensate small wallets to protect individual investors. This option will help 99.6% of small wallets recover.
PersianCapital’s proposal is also backed by Vitallike, the founder of ETH and CZ. They think this option is reasonable to save small investors and reasonable compensation.
Binance is also an exchange affected by the Terra incident, but they also want to prioritize investor support. Initially, Binance received 15 million LUNA (at its peak worth 1.6 billion USD at the time) as part of its initial investment of 3 million USD. At the same time, this exchange also has about 12 million UST from staking LUNA. To date, this amount of UST and LUNA Binance has not moved or sold any coins. However, Binance still prioritized user protection and asked the Terra project team to compensate retail users first.
As for Do Kwon, after several proposals, the final proposal was combined with his previous proposal and PersianCapital. This proposal will Terra string transfer into a new chain without algorithmic stablecoins. The old chain is called Terra Classic (Luna Classic token – LUNC) and the new chain is called Terra (Luna token – LUNA)
Luna will be airdropped to Luna Classic staking participants, Luna Classic holders, remaining UST holders, and essential Terra Classic app developers.
In general, non-community people and developers are airdropped but will have to lock up to not be able to sell LUNA for at least 1 year whether they want to or not. This proposal is not supported by CZ of Binance. Do Kwon seems to want to quickly vote and approve the proposal, but many people are still questioning the proposal. Voting also does not introduce other proposals or let the community vote for themselves.
Some other information:
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El Salvador will host an international bitcoin event on Monday, where 44 central banks and key financial institutions have been invited. The meeting will discuss El Salvador’s adoption of Bitcoin and its benefits around three key areas – including finance, the digital economy, and banking for the unbanked.
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Celsius Mining, the mining subsidiary of cryptocurrency lending platform Celsius Network, has filed paperwork with the U.S. Securities and Exchange Commission, or SEC, proposing an initial public offering. public (IPO).
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Coinbase Global reported disappointing first-quarter earnings — in which the largest U.S. crypto exchange reported a quarterly loss of $430 million and a 19% drop in monthly users. In addition, an update on the risks of using Coinbase’s services could come as a surprise to millions of users. In the event of a crypto exchange going bankrupt, Coinbase said, its users could also lose all the crypto stored in their accounts.
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