🤯 WTF Is Happening?!
More than $600 billion got erased this week from crypto market as sell-off continues
I have decided to delete all crypto related apps from my devices. I want to do an actual job, where I get the chance to feed people. 👩🏻🌾 McDonalds Careers
..Bruh..it is better if we do not talk about it..Red everywhere..more red in crypto than McDonalds.
So what happened yesterday?
Markets have been absolutely wild. Terra Luna and $UST Saga continued. A massive sell-off brought down Terra Luna at 3 cents (for comparison a week ago was ~ $88) while $UST is currently sitting at 61 cents (pretty good recovery compared to 30 cents that it was yesterday). The current slow recovery and why is happening was already addressed from his twitter thread posted the other day.
He argues that the only way to move forward is trying to bring $UST up to repeg, which will come with a cost to Terra Luna holders like we have seen because they are the ones to eat the L and hope it recovers.
Do Kwon did not make anymore announcements since his last thread. Lot of people across different social media channels argue about how they lost lot of money. Some of the posts on LUNA’s reddit (none of which are confirmed btw):
There are all different types of rumors (reddit post with rumor details) out there on who is responsible for the fall of Terra LUNA, including BlackRock and Citadel, which both of those deny any involvement in LUNA fall.
🤯 WTF is happening?!
More than $600 billion got erased this week from crypto market as sell-off continues ($200 billion got erased just yesterday). Current market cap is sitting at $1.2 trillion.
People lost shit ton of money. BTC went as low as $26.6k (the lowest since December 2020) while ETH went as low as $1.7k ( the lowest since July 2021).
People are moving away from cryptocurrencies considered the current high volatility in the markets and the massive sell-off happening. In normal economic conditions, money taken from crypto would go in other investing alternatives such as stock markets. The issue is now that even stocks, especially tech stocks have plummeted, partially because their exposure in crypto and also their absurd valuation which sky-rocketed during pandemic.
Economic outlook moving forward does not look well either.
Bureau of Labor Statics posted U.S. inflation data this week. It shows 8.3% jump during the month of April, almost the highest it has been in the last 40 years, with Energy being the main driving category of the inflation (i.e. fuel oil and gasoline).
Same thing with interest rates. 30yr Fixed Rate Mortgage is currently sitting at 5.3%, the highest since 2010.
There is a negative correlation between interest rates and spending.
When interest rates are rising, businesses and consumers tend to cut their spending, they put their money into savings (if their disposable income allows that) instead.
When interest rates are falling, businesses and consumers tend to increase their spending as it becomes cheaper to finance those activities.
The current market conditions show signs of interest rates rising. It becomes more expensive for businesses and consumers to borrow money. They get into savings mode. But bills will keep coming the same (if not higher). You still have a fixed cost to maintain. In such conditions, you have less disposable income. Guess what? You ain’t got no money to invest, all you try to do is survive.
So why this lecture Mr.Professor?
All this trying to prove a point that we might not see a recovery anytime soon. With the current conditions such as CPI Inflation rising, interest rates rising, and the massive sell-off we have seen on crypto, are indicators that this period where we will be on red is not here just for a few days, it might be with us for a little longer.
I might be late with the advice but I will still post it. I came across this quote, I have no idea who said it but I really liked it.
Invest with your beer money, not your milk money.
🗞️ Other news in the space
Coinbase loses half its value in a week as crypto slumps
Global Crypto Regulatory Body Is Coming Soon, Says Top Official