Read in the Digest:
- LUNA down 100% as supply exceeds 6.5 trillion, whilst Binance delists LUNA amid blockchain shut down.
- Bitcoin recovers to above $30k, pushing market dominance to six-month high.
- Robinhood (NASDAQ:HOOD) spikes 20% as FTX chief buys 7.6% stake – Ark Invest buys $3 million in Coinbase (NASDAQ:COIN) shares.
- “Crypto Mom” says stablecoin regulations need to make room for failure, and Janet Yellen calls for regulation.
LUNA Down 100% as supply Exceeds 6.5 Trillion, Whilst Binance Delists LUNA Amid Blockchain Shut Down
In the wake of the sharp price drop which began on Monday, May 9th, the UST stablecoin lost its peg, subsequently causing Terra (LUNA) to crash by 100%. LUNA, which had been trading as high as $65.14 on Monday, is now trading at a meager $0.00003829, as of this writing.
The 7 day price chart for Terra (LUNA). Source: CoinMarketCap
Further fueling rumors of manipulation around the Terra (LUNA) market crash, the circulating supply of LUNA has now exceeded 6.5 trillion coins. According to data from Terrascope, 345.9 million LUNA were in circulation on Monday, but exponentially increased as the coin continued to lose ground.
LUNA supply history. Source: Terrascope
The misery continued to pile up on Terraform Labs as the Terra blockchain experienced network problems. Terra Validators switched off the blockchain indefinitely after managing to restore the Terra blockchain at 13:45 EST on Thursday afternoon.
As the tumultuous week draws to a close for Terra, the world’s largest crypto exchange, Binance, announced the delisting of LUNA from its platform. All LUNA futures, margin, and spot trading pairs have hence been removed from the Binance exchange.
Flipsider:
- Fitch Ratings, an American credit rating agency, remarked that the de-pegging and subsequent crash of Terra will “accelerate calls for regulation.”
Bitcoin Recovers Above $30k, Pushing Market Dominance to Six-Month High
Bitcoin is beginning to show signs of recovery after the TerraUSD (UST) and LUNA crisis caused the world’s largest cryptocurrency to plunge to below $27k—its lowest price point in 16 months.
Over the last 24 hours, the price of Bitcoin surged 9.5%, pushing its price from $27,600 to an interday high of $30,921.
The 1 day price chart for Bitcoin (BTC). Source: CoinMarketCap
Bitcoin’s rally, tapped by the broader crypto market, has seen the global crypto market recover 10% in the last 24 hours.
The 7 day global crypto market cap. Source: CoinMarketCap
Although Altcoins have rallied alongside Bitcoin, its market dominance has increased, largely due to the sharp decline experienced across the board last week, with Altcoins particularly suffering.
The Bitcoin dominance chart. Source: CoinMarketCap
On May 12th, the Bitcoin Dominance Index climbed to nearly 45 percent, its highest level since November 2021. Bitcoin dominates 44.5% of the crypto market, with Ethereum, its closest competitor occupying 19.2%
Flipsider:
- Despite Bitcoin’s recent recovery, Rich Dad Poor Dad’s Robert Kiyosaki has said he plans to buy Bitcoin when it bottoms at around $17K.
Why You Should Care
The recent rally could mark the end of the bear cycle, which was intensified by the LUNA crash.
Robinhood Spikes 20% as FTX Chief Buys 7.6% Stake – Ark Investment Buys $3 Million in Coinbase Shares
The shares of online brokerage firm Robinhood, have rocketed 20% after Sam Bankman-Fried, the billionaire founder of crypto exchange FTX, disclosed the acquisition of a 7.6% stake, worth $648 million.
Bankman-Fried called his Robinhood purchase an “attractive investment.” He later clarified that he has no “intention of taking any action toward changing or influencing the control of Robinhood.”
In a similar move, Cathie Wood’s Ark Invest has bought $3 million worth of Coinbase (COIN) stock. The share price of Coinbase (COIN) tanked 26% to $53.72 on Wednesday after the exchange reported a net loss of $430 million for Q1 2022.
On Wednesday, three funds under Cathie Wood’s Ark Investment Management bought a combined total of 546,579 Coinbase (COIN). According to Cathie Wood, the share prices of tech firms like Coinbase are currently in “Deep Value territory”.
Flipsider:
- Robinhood saw an 18% decline in revenue for Q1 2022 and made the decision to lay off 9% of its workforce three weeks ago.
Why You Should Care
Shares into crypto firms have lost value as digital assets continue their poor run of form, but investors expect a rebound with the recovery of crypto.
“Crypto Mom” Says Stablecoin Regulations Need to Make Room for Failure, and Janet Yellen Calls for Regulation
Commissioner Hester Peirce, affectionately known as “crypto mom”, has opined that the new stablecoin regulations being developed by the Securities and Exchange Commission need to make room for failure.
Pierce made the comments during an online panel debate hosted by the London-based ‘Official Monetary and Financial Institutions Forum (OMFIF)’, when asked about the future of stablecoins in the wake of TerraUSD’s (UST) collapse.
Flipsider:
- On the other hand, Treasury Secretary Janet Yellen has called for the regulation of stablecoins before the end of the year. Yellen also remarked that she does not believe that the rapid growth of crypto poses a real threat to the country’s financial stability.
- In order to check the risks, which Yellen says are “in connection with bank runs,” the treasury secretary has called for ‘responsible‘ crypto innovation.
Why You Should Care
The nature of the regulations being adopted could either contribute to the growth and adoption of crypto, or stifle the industry’s growth.