What If Market Like March 2020 Will Happen? CFTC

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2022-08-13 14:06:43

Market situation

Bitcoin recovers to around $30,000. Altcoins also rose slightly.

The stock market ended the session slightly lower. But the futures market shows a more positive uptrend. Oil contract price remained around 110 USD/barrel. Gold is similarly holding at 1839 USD/ounce.

The massive impact of the war between Russia and Ukraine on the chain will continue as the war threatens to drag on even further. Recently, Finland and Sweden have submitted applications to join NATO. President Joe Biden on Thursday said Sweden and Finland have the full backing of the United States. All 30 NATO members must unanimously approve a country’s acceptance into the organization.

Moscow, long wary of NATO expansion, has opposed the two nations’ plans to join the alliance. Earlier this week, Russian President Vladimir Putin said Finland and Sweden joined NATO and any expansion of military infrastructure into the territory would inevitably lead to a Russian response.

Sensing that the war could drag on even further, McDonald’s decided to sell its Russian business to Alexander Govor, the current licensee in the market. Govor will acquire all of McDonald’s locations in Russia and will operate them under a new brand. He also agreed to retain employees for at least two years, on equivalent terms, and to finance the salaries of company employees working in 45 regions of the country until the deal closes and the payments are made. existing debt to suppliers, landlords and utilities.

A market affected by slower inflation is real estate also starting to show more obvious signs. According to the National Association of Realtors, sales of previously owned homes in April fell to their lowest level since the Covid pandemic began.

Tight supply causes house prices to soar, despite rising interest rates. The median price of an existing home sold in April was $391,200, the highest on record and up 14.8% from a year ago. Although the number of homes for sale has increased slightly, the number of people who have not been able to buy a home is also at a high level. Many people are waiting as the unemployment rate rises and home prices go down to buy.

Investor fear is said to be equivalent to March 2020. Let’s take a look at how the stock, gold and crypto markets were at that time. At that time, stocks, specifically the Nasdaq index, fell rapidly because investors did not know the length and impact of the epidemic. So they want to hold cash instead of assets. Bitcoin is also trending with stocks.

Gold also fell sharply and quickly within a week. However, the drop rate of gold is lower than Nasdaq and BTC. The reason gold fell less is because gold’s previous growth is not as big as the other two markets.

After falling, gold is also the asset that recovers the fastest. It only took about 3 weeks for gold prices to return to pre-bullish levels. And BTC and Nasdaq need 3 and 4 months respectively to recover the price before falling.

Currently, many investors are waiting for signs of gold price recovering. This is a sign that investor sentiment has calmed down and money is returning to assets.

Bank of America (BAC) second-largest US bank says that fears of a so-called crypto winter are unfounded. The bank also emphasized that Digital Assets are facing the same difficulties as traditional assets, including rising inflation, higher interest rates and increased recession risk. This is the general macroeconomic effect that affects all assets, not just crypto.

Tether publishes audit report

The collapse of Terra and its UST stablecoin, which occurred just over a week ago, has caused a real panic in the stablecoin segment. Some of them like USDC and BUSD are more trusted and trade at a premium compared to the market. Others like USDN, DEI, and USDT find themselves under severe pressure mainly because of users’ lack of trust in them.

Particularly, USDT is the coin with the largest capitalization in stablecoins, there have been many rumors and doubts about its safety, causing a relatively large amount of money to be withdrawn from this stablecoin. However, it still stands after the event of UST. Periodically, recently Tether company has published its audit report. Performed by independent accountant MHA Cayman, attesting to the group’s assets as of March 31, 2022, Tether’s total assets are $82,424,821,101.

Tether’s total consolidated assets are higher than the amount of USDT issued. The report shows that the reserve assets are quite safe, especially compared to the previous audit. More than half of assets are stored in US government bonds, which are very safe bonds. This is followed by reserves in short-term Class A commercial papers that are well-regarded. Tether’s reserves in commercial paper also fell 17% quarter-over-quarter of commercial paper from $24.2 billion to $19.9 billion. This shows that Tether is also in the process of transitioning to more secure assets.

Ethereum’s The Merge Update

Ethereum programmer Beiko says that The Merge will not be implemented in June as planned. Ropsten testnet Merge update is set to go live on June 8. Ropsten testnet Merge will see the PoW testnet combined with a new PoS consensus layer testnet. Next, The Merge was officially rolled out in August, the shard chain upgrade is expected to be live in early 2023.

Some other information:

  • Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam has expressed his belief that Bitcoin and Ethereum are commodities and should be regulated with the CFTC. He argued that separating which would be a necessary step towards proper regulation.

  • Julius Baer Group, a private Swiss bank, will begin offering bitcoin and other crypto products to high net worth individuals. Julius Baer explains that we may be seeing a bubble similar to the dot-com explosion that created a new industry.

  • Trading platform Robinhood is launching a multi-connected web3 crypto wallet that will launch as a standalone app. Customers will be able to keep the keys to their own cryptocurrency and have full control over the crypto in this wallet.

  • The US branch of crypto exchange FTX plans to launch commission-free stock trading. FTX US will offer free brokerage accounts, commission-free trading and market and company data. For now, the new service is limited to a small number of US users. Users can use cash or stablecoin USDC to buy and sell securities.

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