Good morning and welcome to First Mover. I'm Brad Keoun, here to guide you through the latest crypto markets, news and insights. (Lyllah Ledesma is out this week).
- Price Point: Bitcoin has settled just below $30,000, although Solana's SOL and Cardano's ADA have seen larger losses.
- Market Movements: Traditional markets look weak, and that's not a good sign for cryptocurrencies, considering the stronger correlation between U.S. stocks and bitcoin - effectively the lodestar for digital asset markets, reports Shaurya Malwa.
- Notably, a crypto wallet linked to South Korean venture fund Hashed appears to have lost about $3.5 billion in value amid last week's price collapse for the Terra blockchain's LUNA tokens, Sam Reynolds reports.
Price point
Bitcoin (BTC) held steady after a 5.7 percent decline on Wednesday that brought the price back below the $30,000 mark - an increasingly important level in the fight against a deeper selloff.
The largest cryptocurrency rose 1.4 percent in the last 24 hours to $29,427 at press time. Ether (ETH), the second largest cryptocurrency, lost 3.6% to $1,956. Solana's SOL and Cardano's ADA posted larger losses.
However, sentiment in traditional markets remains gloomy, with U.S. stock futures trading lower on growing concerns that higher interest rates and rapidly rising inflation will seriously impact the economy. The Wall Street Journal editorial board warned of a possible crisis in emerging markets as analysts and economists begin to assess the possibility of increasing debt repayment problems in the face of higher borrowing costs.
Market Moves.
By Shaurya Malwa
Fading sentiment on strong economic growth led to a second day of sell-offs in broader markets Thursday morning.
Asian markets slid after a day of red in U.S. equity markets, leading to sell-offs in Bitcoin and other major cryptocurrencies.
Weakness in global markets increased on fears that spending could fall in the coming years as the West raises interest rates and tightens monetary policy.
Price movements in cryptocurrencies have recently taken their cue from traditional U.S. markets, with Bitcoin trading similarly to a risky tech stock. And as fears grow about the precarious state of traditional markets, Bitcoin continues to come under pressure.
As reported, inflation is forcing consumers to spend more on groceries and less on discretionary items. Walmart (WMT) lowered its profit forecasts on Wednesday, citing higher fuel and labor costs.
Federal Reserve Chairman Jerome Powell has pledged to continue tightening monetary conditions until inflation declines, with some crypto analysts expecting a further correction in cryptocurrencies if current market conditions persist.
Last Headlines.
- Curve Finance proposes to end CRV token issuance at all UST pools On-chain participants are already voting "yes" to end CRV issuance at all liquidity pools with UST.
- Ethereum on track for Testnet Merge in June The Testnet Merge would allow developers to work on any potential risks or bugs before Ethereum moves to a Proof of Stake network.
- FTX US is launching equity trading to get a bigger piece of the U.S. retail pie Brokerage accounts can be funded with the stablecoin USDC, the exchange said.
- BofA says crypto winter, contagion concerns are overblown The collapse of the Terra network was due to prioritizing mass adoption over price stability, the bank said.
- Nomura's digital division initially focused on cryptocurrencies, and later on DeFi. The first phase of Nomura's new digital assets division will cover the top 10 cryptocurrencies, while DeFi and NFTs will follow later.
- Institutional DeFi enabler? Data firm Kaiko explores DEX liquidity with a new product. The data feed shows what's happening in the Uniswap, SushiSwap, Curve Finance and Balancer asset pools.
- New York bitcoin miners abandon state over regulatory uncertainty The state was once a magnet for miners, but environmental concerns are weighing on the bitcoin mining industry.
- A16z Leads $15M Round for P2E Studio Azra Games The blockchain gaming company is preparing to launch a fantasy-collecting, mass-combat role-playing game.
- U.S. appeals court orders SEC to try enforcement actions to jury The 5th Circuit Court of Appeals found that the constitutional rights of the targets of SEC enforcement actions were violated by the use of in-house judges.
- How do you tax an NFT? Plans to share bitcoin data with foreign tax authorities may be difficult to adapt to transparent, decentralized blockchains - but once in place, new rules are hard to change.
- News Analysis: Despite Recent Bumps, Stablecoins Will Stick Around Why institutional investors will put digital asset volatility and bad headlines behind them again.
Feature: Hashed wallet suffers $3.5 billion loss, Delphi announces loss after Terra collapse
By Sam Reynolds
The collapse of tokens associated with the Terra ecosystem, stablecoin terraUSD (UST) and Luna (LUNA), has led some major investors to disclose their losses.
Take Hashed, an early-stage venture fund based in Seoul, South Korea. The company played a role in Terra's 2021 venture round, where it raised $25 million, according to Crunchbase data.
"We were immediately impressed with the sophistication of their mechanical design and speed of execution," Hashed wrote of Terra in 2019. "They've done an outstanding job of product development, hiring, facilitating and interacting with the community, and more."
In public, Hashed has said they are "financially sound" and Hashed Ventures has not been affected by the crisis.
However, on-chain data shows the company has deployed over 27 million LUNA in the Columbus 3 mainnet, 9.7 million LUNA in the Columbus 4 mainnet, and 13.2 million LUNA in the current Columbus 5 mainnet. Hashed did not respond to an inquiry from CoinDesk by press time.
Delphi Digital, a research firm and boutique investor, admitted in a blog post that it always had concerns about the structure of UST and LUNA, but believed the substantial assets found in the Luna Foundation Guard would prevent the unthinkable.
"We have always known that such a thing was possible, and we have tried to emphasize the risks of such a system in our investigations and public comments, but the fact is that we have misjudged the risk of a "death spiral" occurring. We have taken some criticism for this over the past week, and we deserve it. The criticism is fair and we accept it," the company wrote.
Today's newsletter was edited by Brad Keoun and produced by Parikshit Mishra and Stephen Alpher.